Timing This is the first of a three part series on the disconnect between the Case Shiller Index for DC and what is happening in the current market.
The other day I presented my frustration with the disconnect that some national housing indexes have with local housing markets and how it helps form inaccurate real estate consumer confidence. Namely the S&P/Case Shiller Home Price Index for Washington DC doesn’t reflect the housing market by geography, timing, seasonality among other reasons.
In the chart above, I represented the timing of the information that was reported in May for both the RBI Pending Home Sale Index and the S&P/Case Shiller Home Price Index for “Washington, DC”.
RBI: New pending sales for the month of April were reported in the RBI Pending Home Sale index on May 11th, 11 days after the end of the month. Normally they are reported at 10am on the 10th of each month unless there is a timing conflict with a weekend.
CSI: I reverse engineered the date range that would include the months that likely contained the pending sales that eventually closed and were reported on May 31st. Since CSI uses a 3 month average to create the monthly data point, I picked the last day of the middle month since I used the last day of April for the RBI 11-day calc. I also assumed 3 months between contract date and closing date and arrived at a 182 day lag from the contract date to the reporting date of May 31st. I selected 3 months since that seems to be fairly reflective of short term market price response to sharp changes in sales activity.
Other posts in this 3-part series:
II Metro DC/Case Shiller Disconnect (Part II of III): Seasons [MRIS Blog]
III Metro DC/Case Shiller Disconnect (Part III of III): Prices Lag Sales [MRIS Blog]