Yup, I missed Tuesday’s Case Schiller Report. Between February and March, Portland’s Index dropped from 176.24 to 174.39. A small decline but a decline nonetheless and return to April/May 2006 levels.
I also found this article, on the back page of Realtor Magazine (NAR’s publication), an opinion piece that says Case-Schiller is a conflict of interest.
Created by Shiller and Karl Case, an economics professor at Wellesley, the index is licensed exclusively to Macromarkets LLC for “developing, structuring and trading financial instruments,” says the Macromarkets Web site. Among Macromarkets’ products is the Housing Futures and Options index, which forms the basis for “directly investing in and hedging U.S. housing” on the Chicago Mercantile Exchange, where futures and options on the index are traded. “Every time a CME hedge is made, revenue flows to Macromarkets,” says NAR’s chief economist, Lawrence Yun. “People would hedge only if they believe price movements will be volatile.” Shiller is a founder and chief economist of Macromarkets. So, is the index biased to the negative? Its divergence from OFHEO’s findings is so wide that Andrew Leventis, the agency’s senior economist, has undertaken studies to find out why.
It will be interesting to see if their is a divergence. Is it Realtor backlash to negative markets or does it have foundation?
In the future, if you think I’ve missed something, bring it up politely rather than being snide about it.