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   The WWM Auction Index™, The WWM Auction Index1, a gauge of residential property values for 20 metro areas, was up 0.1% in February 2012 from the previous month. The S&P 500 was up 3.3% in March 2012 compared to February. The most recent S&P/Case-Shiller 20-City Composite Home Price Index shows a 0.8% decline in home prices for January 2012 compared to December.
Analyst Observations
Gains in the WWM Auction Index are similar to results reported by other recent housing market reports. The CoreLogic Non-Distressed Home Price Index, reported home prices rose 0.7% in February 2012 from January.3 The National Association of Realtors reported a 4% increase in existing home sales in January vs. last month.4 A RE/MAX housing survey of 53 metro areas showed national home prices in February 2012 rose 1.4% from January. RE/MAX Chief Executive Margaret Kelly said “As sales numbers have trended higher for several months, we have been anticipating a turnaround in home prices, and it looks like it’s finally starting”.5 Gains in the WWM Auction Index align closely with month to month increases in the S&P 500.
Comparables
S&P Case-Shiller and WWM Auction Indices have displayed consistent market fluctuations. Despite these consistencies, a critical difference is the Auction Index provides more real-time data, as the index tracks timely and consistently with S&P 500 trading performance. Therefore, if previous correlations between the indices continue as expected, similar Auction Index trends are expected to appear in the Case-Shiller index in the coming months.
For example, the S&P Case-Shiller home prices are a three-month moving average, which means September readings reflect transactions that closed in July, August, and September 2010. In other words, the numbers reflect a home price decline in Q3; a similar decline was already seen in the Auction Index in Q2 2010.
More about the WWM Auction Index™
The WWM Auction Index is constructed from an auction performance ratio, calculated monthly for 20 metro areas, using a three-month exponential moving average algorithm. It is released by the 10th of every month. The Auction Index provides more timely results by applying added weight to recent data points to reflect fluctuations in the market value of residential real estate. To be included in the Auction Index, a set of well-defined data parameters have been assigned to proprietary auction sales data. This creates a clean, statistically valid data subset to control against volatility and consistently provides a more accurate constant-quality view of pricing trends. The Auction Index is designed to provide a timely indicator of real estate market movement, including the direction and severity of shifts.
About the S&P/Case-Shiller Index
The S&P/Case-Shiller Barometer of Home Prices is calculated monthly using a three-month moving average and published with a two month lag. The S&P/Case-Shiller Composite of 20 Home Price Index, the leading measure of U.S. home prices, is a value-weighted average of the 20 metro area indices. It combines matched price pairs for thousands of individual houses. The index is calculated based on the repeat sales regression methodology, an approach measuring the change in the actual transaction prices for a pair of sales of the same property.
Williams & Williams Marketing Services auction data
(1) Williams & Williams Marketing Services auction data
(2) Source: housingwire.com, January 31 2012, S&P/Cash Shiller Records 3.7% Annual Drop in Home Prices
(3) Source:www.housingwire.com, March 7 2012, Home prices at levels of 10 years ago: CoreLogic
(4) Source: National Association of Realtors, February 22, 2012
(5) Source: www.housingwire.com, March 14 2012, Home prices rise for first time in18 months: RE/MAX
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