The home price puzzle: which reports should you care about?

You may hear on the evening news or in your local paper that "home values were down 5% last month" or "foreclosures doubled," but what does all that really mean to you? For the most part, not a whole lot.

Our friends at just put out this article that does a good job looking at three of the major home valuation reports or "indexes" that are often cited in the media.

Now, you may be thinking, this is too much work for me to look at all these reports and try to figure out what my home is worth. For that very reason, web sites like and Cyberhomes have popped up in the past few years, to offer you a real-time look at what your home may or may not be worth. Real Estate ABC also has a home valuation tool. AOL's real estate channel has a home values page, powered by Cyberhomes, for free. But the value for your home can vary widely from site to site, so if you really want to get dirty, here's an overview of the three major indices.

One report that is increasingly popular is the S&P/Case-Schiller Index, named after the two professors who developed it, and the company, Standard & Poor's, that publishes it. This report comes out every month, but it only looks at 20 major U.S. cities (up from 10), and it does not include condominiums or new construction homes. It also is usually at least a month behind, so if you hear the new report came out, that is generally for the data of two months ago. This makes it somewhat out of date, given the volatility of the current market, but because the other two reports only come out quarterly, it's the best we have right now. If you don't live in one of the 20 cities that the index looks at, then it's basically like when you hear that the Dow Jones or NASDAQ was up 100 points and you don't own any stocks in the Dow, making that information irrelevant to you. You may not feel great when the Dow goes down 500 points, but you shouldn't necessarily freak out either. Because it looks at the 20 biggest cities, it is relevant to a lot of Americans, but certainly not all.

The National Association of Realtors puts out its median home price report once a quarter, based on data from the Multiple Listing Services it works with, so in theory it should have the best data, and it looks at cities of all sizes, from Akron, Ohio, to Yakima, Washington. If you want to get the data for yourself, go to the NAR's site, However, this data, since it comes out once a quarter, is also generally out of date, but at least you can get a hard number for your city or one that is closer by. The trade group also excludes for-sale-by-owner homes and new construction homes, but do include condominiums.

Finally, the Office of Federal Housing Enterprise Oversight (OFHEO) also puts out a quarterly report, but because it only looks at homes guaranteed by Freddie Mac and Fannie Mae, it does not include more expensive homes that would have jumbo mortgages, which until recently, was anything above $417,000. However, if you live in a part of the country where most homes cost less than $500,000, the OFHEO survey is going to capture most if not all of the homes in your area, and it also includes new construction and for-sale-by-owner homes. But in areas like New York or Los Angeles, it will not. You can use the OFHEO's free calculator to try to figure out the value of your home.

If you really want to find out how much your home is worth, call your local real estate agent for a market analysis, and then see what happens. You may be pleasantly surprised.

Brett Widness is an editor with AOL's real estate channel and a licensed real estate agent in Virginia.
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