A better method to estimate price change in single family housing: A test of median‐to‐median compared to repeat sales
International Journal of Housing Markets and Analysis
ISSN: 1753-8270
Article publication date: 27 July 2012
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.
Keywords
Citation
Epley, D. (2012), "A better method to estimate price change in single family housing: A test of median‐to‐median compared to repeat sales", International Journal of Housing Markets and Analysis, Vol. 5 No. 3, pp. 313-327. https://doi.org/10.1108/17538271211243625
Publisher
:Emerald Group Publishing Limited
Copyright © 2012, Emerald Group Publishing Limited