I told you so!

Dennis Norman

Bear with me, I’m really not an ego-maniac, it’s just so infrequently that anyone of any real authority, or with “PhD” behind their name, agrees with me, so when it does happen I have to sound the horns and bask in the glory while it lasts!

If you have read any of my articles on any blogs about home sales and new home starts you are well aware of my usual rant about, and distrust of, “seasonally-adjusted” numbers. Up until today I really just thought this was my simple-minded way of looking at things and, even though I think it makes sense, was not surprised that economists were not following my lead.

Well, today Standard & Poor’s, the world’s leading index provider and publisher of the closely followed S&P/Case-Shiller Home Price Indices, announced they agree with me! Well, they didn’t actually mention me in their statement, however the statement they issued is consistent with my rants:

After reviewing the data, the S&P/Case-Shiller Home Price Index Committee believes that for the present time, the unadjusted series is a more reliable indicator of U.S. housing trends than the seasonally adjusted series. Therefore, the Committee suggests that reports should focus on the year-over-year changes in U.S. home prices where seasonal shifts are not a factor, and if monthly changes are considered, that the unadjusted series should be used.”

All right, enough patting myself on the back…I’ll stop. Seriously though, I have to admit that I am impressed that Standard and Poors made such a radical change in it’s philosphy and is willing to step out and approach the market differently than they have in the past. It seems most of the publishers of indices, economists, and the like just stick with the same old approach that has been used for the past couple of decades without ever stopping to see if their approach is still relevant.
Hat’s off to the S&P/Case-Shiller Home Price Index Committee!

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