For those of you tired of hearing about the Case-Shiller index, Oxford, Miss.-based FNC has provided an alternative. The company announced its new FNC Residential Price Index™ (RPI) and the annual National Association of Real Estate Editors conference (NAREE) in San Antonio, Texas. FNC’s Chief Data and Analytics Officer Bob Dorsey made the announcement, telling attendees that FNCs index is more accurate than other home price indexes.
“The RPI combines public record data along with data collected from millions of appraisal reports shared with FNC by its lender clients,” said Dorsey. “Combining all this data enables FNC to improve the accuracy of measuring the value of housing markets nationwide."
The RPI is a hedonic index, which means its data is based on the physical characteristics of all properties in a given market over a specified time period. FNC maintains that a hedonic price index is significantly more accurate than many of the other indexes on the market, including Case Shiller’s repeat-sales index.
“Due to the fact it is based upon so many properties, you can slice and dice it in a way that you cannot do with a repeat sales index,” said Dorsey, FNC co-founder and inventor of the compliance and workflow technology used by the majority of the nation’s largest lenders.
In his speech, Dorsey covered the current state of home prices as reflected in FNC’s RPI.
“Most lenders share their valuation data with FNC for the purpose of building a comprehensive source of residential property data,” Dorsey said. “The appraisal data provides a real-time source of sales and property characteristic information that is not otherwise available.”
Houses change and so do their neighborhoods, but the RPI takes all of those factors into consideration. It can determine the effect of school districts on house prices and even reveal how natural disasters impact the price of homes and for how long.
The index is posted monthly for 30 metropolitan areas. Other areas are available to journalists upon request. The index is available for download, and notifications will be sent each month as the data is posted to subscribers. More information about the new index can be found on the company's website.