Posted by Jonathan Miller -Monday, February 14, 2011, 12:29 PM
I was brought in by RealEstate Business Intelligence (RBI), the statistics and research arm of MRIS to further their effort to provide more transparency in their regional housing market. One of the first things I did with their information, whose depth and quality is unlike anything else I have ever analyzed, is build a pending home sales index for the Washington, DC Metro and Baltimore Metro markets.
The biggest problem in understanding the state of housing today is the quality and timing of the information. This podcast is a review of my thoughts on the subject and why a pending home sale index tends to be better at providing the state of a housing market than price indices.
Hint: they lag the moment when buyer and seller agree on a price aka “meeting of the minds” by as much as 5 months, don’t consider the different seasons of the year and are often skewed by seasonal adjustments.