Part Precision, Part Luck

Recently I discussed the merits of the median home price per square foot as a somewhat better indicator of home pricing power than the plain-vanilla median price. Displaying four-month charts of each series, I noted the remarkable smoothness of trend in the former as compared to the latter.

I have since attained some more historical info, and when we zoom out a bit to see the bigger picture, it becomes clear that the median price per square foot hasn’t moved as smoothly as it initially appeared. The seeming tranquility during our initial four month period was as much luck as anything – always a danger with small data sets.

While a bit more volatile than it first seemed, this indicator still looks pretty serene compared to its more widely-cited brethren.