Market Trends - The Repeat Sales Index
In order to better understand market trends, I am providing a summarization of the S&P/Case - Schiller Repeat Sales Index (RSI). The use of repeat sales is a proven method and is the most reliable way to estimate price changes in the residential market. The RSI measures the price change of the same home over time. This method is more accurate than the traditional Comparable Sales or "comps" method because it removes the differences in home characteristics and location.
The index uses January 2000 as 100%; that is the current index is expressed as a number relative to January 2000. As resale prices climb, the index rises. Similarly as repeat sales prices fall, the index gets smaller. The index has a lag of three months in its data.
Click on the picture below to see a larger version. As can be seen, the market peaked in 2006 and bottomed in late 2011. Since then, values have risen sharply but have not yet returned to values that would likely have occurred had there not been a bubble.
The rate of increase that the Phoenix area has been experiencing has slowed since the third quarter of 2013 and remain well below the level that we would have seen had we not "bubbled." In other words, bargains are still available!