Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Tutoring
  • Home
  • Economics, Finance, & Analytics
  • Economic Analysis & Monetary Policy

Repeat Sales Method - Explained

What is the Repeat Sales Method?

Written by Jason Gordon

Updated at April 25th, 2022

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Professionalism & Career Development
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Courses
+ More

Table of Contents

What is the Repeat-Sales Method?How is the Repeat-Sales Method Used?Examples of Repeat-Sales IndexesAcademic Research on the Repeat-Sales Method

What is the Repeat-Sales Method?

Repeat sales method calculates price change of a specific real estate over a different time frame. The repeat sales method is used to provide information about housing price indexes to investors, home buyers and sellers and the housing Industries as a whole. It is also a monitoring indicator of price changes in a home or any other property over a period of time.

Back to:ECONOMIC ANALYSIS & MONETARY POLICY

How is the Repeat-Sales Method Used?

Most housing price index is focused on monitoring home prices within a designated region over a period of time. Hence, not all price indexes are the same and the way they are calculated can cause problems if the housing price trend is not duly represented. In the United States, it is important to monitor housing market trends because the housing market is one of the decisive economic indicators. Price index calculations may be wrong and result in issues if there are inadequacies in the measures deployed to drive at the calculation. For example, selecting random houses that may not necessarily be for sale or with varying sizes and types. An example of an index with a random sample is theNational Association of Realtors (NAR) Median Index or the Census Bureau Median Index. The repeat sales method was primarily deployed to serve as a solution to the structural issues. It was created to closely monitor the price changes of real estate between the current sale and previous sale. The method is useful in calculating the average sales price and it offers a precise alternative to regression analysis. The repeat sales have been able to account for changes in home prices based on sales of the same property. This has been able to curb issues that may arise from differences in the price of houses with similar or varying features. One of the striking disadvantages of this method is that it does not account for homes sold within the specified time of the report and this is also part of market activity.

Examples of Repeat-Sales Indexes

Indexes that use the repeat sales methods are the National Composite House Price Index, Federal Housing Finance Agency's (FHFA), the Case-Shiller Index. One of the most popular housing indexes is the Case-Shiller Index. This index exempts home sales between families which are known as non-arms-length transactions, new construction, condos, and co-ops but monitors foreclosure sales. This index uses the repeat sales method. National Composite House Price Index accounts for changes in home prices in a month, quarter and year, this index is Canadas important home price index. The Federal Housing Finance Agency monthly House Price Index is derived from Fannie Mae and Freddie Macs data on single-family home sale prices and refinances appraisals and CoreLogics LoanPerformance Home Price Index. This covers a wide range of locations than the other price indexes.

Related Topics

  • Quality / New Goods Bias
  • Substitution Bias
  • Consumer Price Index
  • Buying Power Index
  • Core Inflation Index
  • Breakfast Index
  • Employment Cost Index
  • GDP Deflator
  • International Price Index
  • Producer Price Index
  • Capital Goods Price Index
  • Farm (Agricultural) Price Index
  • Harmonized Index of Consumer Prices
  • Repeated Sales Method (Real Estate)



repeat sales method repeat-sales method

Was this article helpful?

Yes
No

Related Articles

  • Balanced Trade - Explained
  • Real Effective Exchange Rate (REER) - Explained
  • Plutonomy - Explained
  • U-Shaped Recovery - Explained



©2011-2023. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand