When I calculate the value of a house, I go to the tax site for the county and look at sales prices on that street in years prior to 2000. I take that value and add 4% per year to the current year. Occasionally there will be some value added or subtracted from an area during that period.

However, beware of expecting the decline from the peak to continue to follow the path of any other particular city – such as San Diego. We can reasonably expect the decline in the two locations only to be the same to the extent that the ‘mispricing’ at the top of the bubble was the same in both cities. Similarly, we can only infer that the maximum index represented similar levels of mispricing at the top (e.g. DC = 250, San Diego = 250, Chicago = 140) only to the extent that the initial index of 100 represented similar deviations from long term ‘true’ values at that time. (And that there have been no structural changes in employment etc that would justify permanent shifts in the relative house price levels between the geographic locations.)

It’s refreshing to see a company take the long view.

Well done!