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A better method to estimate price change in single family housing A test of median‐to‐median compared to repeat sales

A better method to estimate price change in single family housing A test of median‐to‐median... Purpose – The purpose of this paper is to estimate that price appreciation for single‐family sales data for the complete population of deed recordings in one metro area using median comparisons is statistically more accurate in capturing local fluctuations than the repeat sale sample approach published by the Federal Housing Finance Agency. The median comparison method becomes the optimal method of choice due to its simplicity and ease in interpretation. The electronic access to court house records means that the complete population of data should be used to extract a community price trend in lieu of samples. Design/methodology/approach – Local deed recordings for residential housing were compared to repeat sale results from the Federal Finance Housing Admin. The goal is to measure housing price appreciation. Findings – Appreciation measured by local deed recordings captures house price variance better than repeat sales taken from mortgage applications. Research limitations/implications – A median to median comparison with local sales prices should be used in lieu of a national statistic using mortgage applications. Practical implications – This project provides a more accurate method to assess price appreciation. Repeat sales are not appropriate especially in smaller metro areas. Social implications – Every individual and financial institution needs to know the value of its housing asset. The method shown is the best available. Originality/value – The results have huge implications for the academic community where many regression equations are based on repeat sales. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Housing Markets and Analysis Emerald Publishing

A better method to estimate price change in single family housing A test of median‐to‐median compared to repeat sales

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Publisher
Emerald Publishing
Copyright
Copyright © 2012 Emerald Group Publishing Limited. All rights reserved.
ISSN
1753-8270
DOI
10.1108/17538271211243625
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to estimate that price appreciation for single‐family sales data for the complete population of deed recordings in one metro area using median comparisons is statistically more accurate in capturing local fluctuations than the repeat sale sample approach published by the Federal Housing Finance Agency. The median comparison method becomes the optimal method of choice due to its simplicity and ease in interpretation. The electronic access to court house records means that the complete population of data should be used to extract a community price trend in lieu of samples. Design/methodology/approach – Local deed recordings for residential housing were compared to repeat sale results from the Federal Finance Housing Admin. The goal is to measure housing price appreciation. Findings – Appreciation measured by local deed recordings captures house price variance better than repeat sales taken from mortgage applications. Research limitations/implications – A median to median comparison with local sales prices should be used in lieu of a national statistic using mortgage applications. Practical implications – This project provides a more accurate method to assess price appreciation. Repeat sales are not appropriate especially in smaller metro areas. Social implications – Every individual and financial institution needs to know the value of its housing asset. The method shown is the best available. Originality/value – The results have huge implications for the academic community where many regression equations are based on repeat sales.

Journal

International Journal of Housing Markets and AnalysisEmerald Publishing

Published: Jul 27, 2012

Keywords: Appreciation; Methodology; Median comparison; Repeat sale; Housing; Sales

References