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WIKI ANALYSIS
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This article describes an index that measures the performance of an exchange, industry or a geographic region. View articles referencing this index. |
The Case-Shiller Home Price Indices are a benchmark of residential real-estate prices in the U.S. The indices track prices of single-family homes in different geographical areas.
The most-widely cited index among these is the S&P 20 Metropolitan Index (MSA) which is a composite index of 20 cities in the U.S. and is published on the last Tuesday of every month. S&P also publishes a wider National Home Price Index every quarter.
The S&P 20 MSA index was started in January 2000 with a value of 100. It reached its historic high in July 2006 with a value of 206.52. The index had fallen to 164.57 in August 2008 due to the subprime crisis in the U.S.
The indices are calculated by Fiserv Inc. and are distributed by a partnership with Standard & Poor's.
Index Calulation
The indices are calculated using the repeat sales method developed by Robert Shiller and Karl Case. It takes into account only houses which have been sold at least twice. The idea is to capture the change in value of houses of the same quality.
The monthly indices are normalized using a 3-month moving average. For example, the July 2007 index point is based on data for May, June and July of 2007. This is used to account for delays in sales-price data reporting and to get a larger sample size.[1]
The 20 MSA index is based on data from:
- Atlanta
- Charlotte
- Cleveland
- Dallas
- Detroit
- Minneapolis
- Phoenix
- Seattle
- Tampa
- Boston
- Chicago
- Denver
- Las Vegas
- Portland (Oregon)
- Los Angeles
- Miami
- New York
- San Diego
- San Francisco
- Washington DC
Investing in the Case-Shiller Indices
The Chicago Mercantile Exchange offers futures contracts on the Case-Shiller Indices. An investor can invest in a local index as well as the Composite Index. Each contract represents $250 times the value of the respective housing index. For example: If the New York index is at 150, each contract will have a value of $37,500.[2]
References
- ↑ Standard and Poor's, Case-Shiller FAQ, Retrieved November 4, 2008
- ↑ CME, Housing Price Futures, Retrieved November 4, 2008
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