CoreLogic Home Value Index - Methodology

 

Due to the evolving COVID-19 situation, CoreLogic will suspend the daily online publication of the Hedonic Home Value Index, as we continue to observe material reductions in the volume of property transactions underpinning the index, creating additional volatility in the daily reading. A robust volume of timely sales evidence is a critical component of accurately estimating the value of residential properties. The monthly results of the index will continue to be reported, but should be interpreted with some caution until transactional activity returns to more normal levels.

The hedonic regression is a method used to calculate the patented CoreLogic Daily Home Value Index. This methodology seeks to overcome the issue of compositional bias associated with median price and repeat sales measures. The premise for this lies in hedonic theory which says that the value of a composite good, such as a house, is the sum of its components. Thus, by separating the sample of houses into their various structural and locational attributes, the differences in these qualitative factors across houses can be controlled.

Hedonic imputation is a method of imputing the value of dwellings having a certain set of characteristics (but no current sales price) by observing the sales prices and characteristics of other dwellings that do have recent sales prices. To learn more about the methodology used in the CoreLogic Daily Home Value indices please refer to the following studies, which have been published in the interests of transparency:

 

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Note: CoreLogic has recently updated the Hedonic Home Value Index methodology and has launched the new model for the latest results released on Sep 1, 2017. To learn more about the methodology update please download the documents above.To read more about the launch click here

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