House Price Index Methodologies PDF

In 2005, both forbes.com and cnnmoney.com published online articles on the topic of the US’s most expensive housing markets. Each of the two articles constructed rankings of housing markets based on the price of a “typical” house, but the method of defining typical was quite different in the two surveys. The ranking by forbes.com used the US zip code as the area of analysis; that is, each zip code was defined as a distinct housing market. For each zip code, the survey constructed a median sales price, the price which is at the halfway point in a list of most expensive to least expensive units in that zip code. As forbes.com itself noted, the unit that has the median price can differ substantially from place to place, and comparing prices across these locations will be like comparing apples to oranges.