RPX Home Index - Calculation and Uses
The Radar Logic RPX Home Index is a single value representing the price per square foot paid for residential real estate in a defined Metropolitan Statistical Area (MSA). It is designed to provide an accurate reflection of the values paid in actual arm's-length real estate transactions. Prices are currently published for 25 Metropolitan Statistical Areas in the United Statest. A composite price index is also published.
A monthly report is presented at the end of each month with a two month lag. October's report was published on January 6, 2009 and I will present some of the findings.
The composite index declined 2.7% between October and Septmber 2008. The index for the New York Region declined 6.6% between October 2007 and Ocober 2008 and 0.1% between September and October 2008.
The RPX Report introduces the concept of Motivated Transactions that I believe really gets to the heart of what is going on in the Real Estate Market today. The report defines Motivated Transactions as liquidity driven transactions from financial institutions, foreclosure service firms and foreclosure auction sales. Motivated Transaction grew to 28% of total sales through October of 2008.
A large portion of the declines in the single family housing indices is related to these Motivated Transactions, which the report estimates takes place at a 32 % to 39% discount to other arm's-length transactions.
The most interesting statistic is the percentage of motivated sales versus other sales. In the Phoenix MSA, motivated sales increased from 6.7% to 40.6% of all sales from Otober 2007 to October 2008. This explains why Phoenix is among the weakest housing markets.
In the NY MSA, motivated sales increased from 1.8% to 4.4% from October 2007 to October 2008 compared to 28% nationwide. This explains why the price declines in our region are less severe than that being experienced by the rest of the country.
For sellers, this means that Motivated Transactions effect the value of your home because those transactions take place at a substantial discount to other arm's-length home sales. For buyers, this means that only 3 or 4 of every 100 transactions is with a Motivated Seller, and from experience, I can tell you that the discounts in prices often reflect the poor condition of foreclosure properties.
One item of note is that the New York MSA is the 3rd best performing with a 2-year Annualized change of -2.1% and the 2nd best performing with a 5-year Annualized change of +4.9%.
The Radar Logic RPX Home Index is a single value representing the price per square foot paid for residential real estate in a defined Metropolitan Statistical Area (MSA). It is designed to provide an accurate reflection of the values paid in actual arm's-length real estate transactions. Prices are currently published for 25 Metropolitan Statistical Areas in the United Statest. A composite price index is also published.
A monthly report is presented at the end of each month with a two month lag. October's report was published on January 6, 2009 and I will present some of the findings.
The composite index declined 2.7% between October and Septmber 2008. The index for the New York Region declined 6.6% between October 2007 and Ocober 2008 and 0.1% between September and October 2008.
The RPX Report introduces the concept of Motivated Transactions that I believe really gets to the heart of what is going on in the Real Estate Market today. The report defines Motivated Transactions as liquidity driven transactions from financial institutions, foreclosure service firms and foreclosure auction sales. Motivated Transaction grew to 28% of total sales through October of 2008.
A large portion of the declines in the single family housing indices is related to these Motivated Transactions, which the report estimates takes place at a 32 % to 39% discount to other arm's-length transactions.
The most interesting statistic is the percentage of motivated sales versus other sales. In the Phoenix MSA, motivated sales increased from 6.7% to 40.6% of all sales from Otober 2007 to October 2008. This explains why Phoenix is among the weakest housing markets.
In the NY MSA, motivated sales increased from 1.8% to 4.4% from October 2007 to October 2008 compared to 28% nationwide. This explains why the price declines in our region are less severe than that being experienced by the rest of the country.
For sellers, this means that Motivated Transactions effect the value of your home because those transactions take place at a substantial discount to other arm's-length home sales. For buyers, this means that only 3 or 4 of every 100 transactions is with a Motivated Seller, and from experience, I can tell you that the discounts in prices often reflect the poor condition of foreclosure properties.
One item of note is that the New York MSA is the 3rd best performing with a 2-year Annualized change of -2.1% and the 2nd best performing with a 5-year Annualized change of +4.9%.