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[Commentary] The RBI Pending Home Sales Index Concept

I was brought in by RealEstate Business Intelligence (RBI) [1], the statistics and research [2] arm of MRIS [3] to further their effort to provide more transparency in their regional housing market.  One of the first things I did with their information, whose depth and quality is unlike anything else I have ever analyzed, is build a pending home sales index for the Washington, DC Metro [4] and Baltimore Metro [5] markets.

The biggest problem in understanding the state of housing today is the quality and timing of the information. This podcast is a review of my thoughts on the subject and why a pending home sale index tends to be better at providing the state of a housing market than price indices.

Hint: they lag the moment when buyer and seller agree on a price aka “meeting of the minds” by as much as 5 months, don’t consider the different seasons of the year and are often skewed by seasonal adjustments.

https://www.millersamuel.com/wp-content/uploads/oldimages/podcasts/2011.02.13-The-Housing-Helix-Podcast-RBI-Pending-Home-Sales-Index-Concept.mp3 [6]