Friday, November 09, 2007

S&P/Case-Shiller/Futures Tool Version 2.0!

Today, I updated the S&P/Case-Shiller/Futures Tool to fix a few annoying bugs and to add functionality that allows for some new and really exciting data visualizations.

For those who are unaware of the tools purpose, please read the tutorial for a detailed explanation but in short, the tool simply allows a user to chart any of the 22 S&P/Case-Shiller home price indices, adjusting elements like the date range and year-over-year changes, as well as simultaneously fusing the latest daily settled futures contract prices for the markets where futures are traded.

The Chicago Mercantile Exchange (CME) supports the trading of futures based on the S&P/Case-Shiller home indices so by fusing the latest results of a given home price index to the latest daily settled contract price for the various contracts available, the tool allows you to essentially see into the future for home prices with, at the very least, the accuracy of a whole marketplace of futures traders.

In an unexpected move, Standard & Poor’s recently released (mega hattip to BostonBubble) a boat load of new data for 17 of the 20 markets they track, now essentially breaking out each metro region into three separate price tiers and even expanding the historical data back as far as 1972 for some regions.

This is a very interesting development as you can clearly see distinct differences between the courses that each tier traversed in the past and the current direction they are taking now.

It’s important to understand how the tiers work in order to make best use of the tool.

The price range in each market’s low, middle and high tier is calculated independently so each market has a different ranges but you can simply visualize the ranges as lower, middle and higher priced single family homes relative to the market you are looking at.

Forgive me, but for now I don’t show the price range values for each tier in the tool (I will implement that in a later update) as I simply didn’t have enough time to parse out that data, store and incorporate it into the view.

The tiers themselves are broken out based on the latest results (i.e. homes that have recently sold in each price range) and then the data is essentially compiled backwards.

It’s important to understand that the S&P/Case-Shiller data is formulated from actual "repeat" existing home sale values that are recorded with actual deed transactions up to the window of time covered by the latest release.

To see the tiers, scroll down to the “Price Ranges” section and “check” the tier you are interested in and remember that “All” tier represents the original “vanilla” aggregate series.

Then click the “Update Chart” button and you will see the tier indices you selected plotted against one of the tiers year-over-year (YOY) columns.

The current charting component I’m using unfortunately does not do such a good job at plotting columns from multiple series so for now you can only show one YOY plot.

Notice that next to each price tier is a “radio button” that allows you to select the tier that you would like to see plotted out on a YOY basis.

Another thing to keep in mind is that the Futures contracts only correlate with the original “vanilla” aggregate series so if you choose a price tier other than “All”, the futures data will NOT plot.

This version of the tool is pretty solid but I have some great ideas for how this data can be better used and soon I will host additional tools to help in analyzing home prices so check back and remember that the Futures data is refreshed every day.

Let me know what you think and of course, if you should notice any bugs!