DEFINITION of 'Repeat-Sales Method'

A way of calculating changes in the sales price of the same piece of real estate over time. Housing market analysts use repeat sales to estimate changes in home prices over a period of months or years. Various housing price indexes use the repeat-sales method to provide information about the housing market to homebuyers and sellers, housing market investors, and those working in the housing and housing finance industries.

BREAKING DOWN 'Repeat-Sales Method'


Perhaps the most well-known housing index that uses the repeat-sales method is the Case-Shiller Index, which measures changes in house prices. It excludes new construction, condos and co-ops. It also excludes non-arms-length transactions, such as home sales between family members at below-market prices. It does include foreclosure sales. Other indexes that use the repeat-sales method are the Federal Housing Finance Agency’s monthly House Price Index, which is based on Fannie Mae and Freddie Mac’s data on single-family home sale prices and refinance appraisals; and CoreLogic’s LoanPerformance Home Price Index, which covers a broader geographic area than the Case-Shiller or FHFA indexes. Canada’s major home price index, the National Composite House Price Index, uses the repeat-sales method, too. Indexes such as these typically report changes in home prices from the previous month, quarter and year. Increasing home prices indicate increasing demand, while decreasing prices indicate decreasing demand.
 
An advantage of repeat-sales methods is that they calculate changes in home prices based on sales of the same property, so they avoid the problem of trying to account for price differences in homes with varying characteristics. Repeat-sales methods also offer a more accurate alternative to regression analysis or to calculating average sales price by geographic area. A shortcoming of repeat-sales methods is that they don’t account for homes that were sold only once during the reported time period. These sales are also meaningful indications of housing market activity. 
RELATED TERMS
  1. House Price Index - HPI

    A broad measure of the movement of single-family house prices ...
  2. Housing Starts

    The number of new residential construction projects that have ...
  3. Foreclosure Prevention Act of 2 ...

    A housing act that is designed to help families keep homes that ...
  4. Open House

    A scheduled period of time in which a house or other dwelling ...
  5. Pending Home Sales Index - PHSI

    An index created by the National Association of Realtors (NAR) ...
  6. Housing Bubble

    A run-up in housing prices fueled by demand, speculation and ...
Related Articles
  1. Investing

    Real Estate Indicators For Prospective Homebuyers

    If you want to buy a home but you’re holding out until market conditions show signs of improvement, housing indicators can help point the way.
  2. Investing

    5 Ways an Open House Can Actually Hurt Your Home Sale

    Open houses have long been a way to get exposure for a home that's up for sale. But it turns out it may be more trouble than it is worth.
  3. Investing

    8 Signs Of A Real Estate Rebound

    Wondering when prices will start to turn around in your area? We'll show you how to get in the know.
  4. Investing

    5 Ways Overvaluing Your Home Can Hurt You

    Getting top dollar for your home is everyone's goal, but overvaluing your home can hurt its chances of being sold.
  5. Managing Wealth

    4 Reasons Why the Housing Recovery Will Be Short-lived (LOW, HD)

    Evidence would suggest that the same culprits from 2008 and some new ones are re-inflating a housing bubble.
  6. Managing Wealth

    The Best Day and Month to List Your Home

    Want to make a quicker sale? Get your house on the market this spring and pick the perfect day of the week to attract buyers.
  7. Insurance

    5 Mistakes to Avoid When Buying a New Home

    Understand five specific mistakes to avoid when buying a new home.
  8. Investing

    Where Are Real Estate Stocks Heading?

    We summarize five economic reports that investors should monitor monthly to keep them informed of where real estate and its related stocks are heading.
  9. Financial Advisor

    Are We Heading for a Real Estate Bubble?

    Housing prices across the United States have been on a steady rise over the past few years. Does this mean we are seeing another bubble?
  10. Managing Wealth

    The Truth About Real Estate Prices

    Historical housing price data suggests ongoing increases in housing prices, but these numbers don't tell the whole truth.
RELATED FAQS
  1. What economic indicators should an investor in the real estate sector consider?

    Find out about economic indicators and which indicators investors in the real estate sector should take into account before ... Read Answer >>
  2. Is there a correlation between inflation and house prices?

    There is a correlation between inflation and house prices - in fact there are correlations between inflation and any good ... Read Answer >>
  3. How does a decline in housing prices affect the banking sector?

    Learn about the affects on banks when housing prices go down, including loan delinquency rates, mortgage foreclosures, and ... Read Answer >>
Hot Definitions
  1. Leverage

    1. The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment. ...
  2. Trumponomics

    Trumponomics is a term for the economic policies of President Donald Trump.
  3. Universal Health Care Coverage

    An organized healthcare system that provides healthcare benefits to all persons in a specified region. Many countries, such ...
  4. Davos World Economic Forum

    The annual meeting of the World Economic Forum hosted at Davos—a small ski town in Switzerland—in January each year is among ...
  5. Smart Home

    A convenient home setup where appliances and devices can be automatically controlled remotely from anywhere in the world ...
  6. Efficient Frontier

    A set of optimal portfolios that offers the highest expected return for a defined level of risk or the lowest risk for a ...
Trading Center