Let’s examine the Case-Shiller Index methodology with the March sales in Carlsbad.
They only use SFRs, so the condos, mobiles, and multi-families are omitted, which is good.
Last month there were 43 MLS sales in Carlsbad, but only 20 of them would count towards the Case-Shiller Index.
The 23 that wouldn’t count:
11 – REOs
9 – Previous sale was brand new
2 – Recent sale was brand new
1 – No previous record
23 – Total
Here is the breakdown of the remaining 20 March sales:
|Previous Sale||% diff|
The Case-Shiller method uses an algorithm for downweighting the older sales, which, if I’m reading it right, adjusts the data based on how far away each sale is from the first. It gives a lot of weight to the short sales and other highly motivated sellers, and discounts the how the long-timers did, but if all they want to do is measure off-peak pricing, it’s probably as good as any.
I like things simple, so I’ll just say that Carlsbad is around 2003 pricing.