Housing Value Index

The Housing Value Index is a pricing benchmark that helps answer a simple question: are homes in a given city or ZIP code selling above or below an inflation adjusted baseline from early 2020. This index compares what buyers are actually paying today to what prices would be today if they had only moved with inflation since early 2020. The goal is not to predict future prices. The goal is to measure whether the market is priced higher or priced lower relative to inflation adjusted fundamentals.

Scroll the CITY table to see the Austin area cities ranked with their early 2020 baseline, their past 90 day median sold price, and their inflation adjusted fair value price. Then scroll the ZIP table to see the same framework applied to the top 75 ZIP codes. Use the “Sold Price vs Fair Value” columns to identify where pricing is stretched above fair value and where pricing has corrected below fair value.

What the Columns Mean

Early 2020 Baseline Median Sold Price is the median sold price from January through March 2020 and is used as the baseline anchor for each city or ZIP.

Past 90 Day Median Sold Price is the market price, using closed sales from the most recent 90 days. This reduces noise compared to using a single month snapshot.

Inflation Adjusted Fair Value Price is the baseline price adjusted forward using CPI inflation so the baseline can be compared to today’s dollars.

Dollar Difference vs Fair Value shows the dollar premium or discount between the past 90 day median sold price and the inflation adjusted fair value price.

Sold Price vs Fair Value percent shows the same relationship as a percentage. Positive values indicate the market is trading above fair value. Negative values indicate the market is trading below fair value.

Housing Value Index Status categorizes each city or ZIP as overvalued, fairly valued, or undervalued using a consistent percentage band.

Active Price Risk Flag is a seller pricing friction signal. It is designed to highlight when active list pricing is above inflation adjusted fair value, and when active pricing is materially above where the market is clearing.

Classification Rules

Overvalued means the past 90 day median sold price is more than 5 percent above the inflation adjusted fair value price.

Fairly Valued means the past 90 day median sold price is within plus or minus 5 percent of the inflation adjusted fair value price.

Undervalued means the past 90 day median sold price is more than 5 percent below the inflation adjusted fair value price.

Active Price Risk Flag Rules

Elevated means the median active list price is above both the past 90 day median sold price and the inflation adjusted fair value price.

Above Fair Value means the median active list price is above the inflation adjusted fair value price but not above the past 90 day median sold price.

Normal means the median active list price is at or below the inflation adjusted fair value price.

Notes and Limitations

This index is designed to be a consistent benchmark, not a forecast. It also reflects the mix of homes that sold in each area. In smaller geographies, medians can move more due to changes in the types of homes selling. That is why the index uses a 90 day window rather than a single month snapshot.

FAQ

How is fair value calculated in this index?

Fair value is the early 2020 baseline median sold price for the area, adjusted forward using CPI inflation to convert the baseline into today’s dollars. That inflation adjusted benchmark is then compared to the most recent 90 day median sold price.

Why use January through March 2020 as the baseline

It provides a stable pre pandemic anchor before the 2020 to 2022 distortion cycle fully took hold, and it gives enough transaction volume to reduce noise compared to using a single month.

Why use the past 90 days instead of the current month?

A single month median can swing due to low volume and changes in what types of homes closed. A 90 day window produces a more reliable market clearing price, especially at the ZIP level.

Does undervalued mean prices must rise from here?

No. Undervalued in this index means prices are below an inflation adjusted early 2020 benchmark. Markets can stay below a benchmark for long periods if affordability, rates, or demand are weak.

Why can an area be overvalued but have a Normal active risk flag?

Overvalued is a valuation reading based on closed sales. The active risk flag is a seller behavior signal. If sellers are pricing at or below current clearing prices, near term pricing friction may be lower even if the area remains above inflation adjusted fair value.

How often is this updated?

As often as the underlying sold and active data is refreshed and the CPI series updates. The current revision date is shown on the tables.

Do you have any more questions? Please fill out the form below and we'll get back to you ASAP!

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Housing Value Index

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Housing Value Index