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Wednesday, September 29, 2010

Read why Case-Shiller Home Index is wrong: Zerohedge

Case-Shiller is now the gauge used to measure home prices.  Zerohedge has reason to believe it's index made to shield us from the worst news.
Guess what? The CS index doesn’t capture condos or new construction sales, both of which are lagging heavily.
 Guess what? The CS index doesn’t capture investment properties, only owner occupied homes.
Guess what? The CS index doesn’t capture multi-family housing, only single family detached/semi-detached housing.
Care to hazard a guess of whether banked-owned REOs are included in the Case Shiller index calculation?Guess what? The Case Shiller index has a minimum holding period to be included in the index which excludes practically all of these investor flips, which also tend to double count sales, when in reality only one real organic sale occurred.
If you are a housing nerd this is a good article to read

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