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In the first half of 2007, the median-based price measures got fairly out of step with the more accurate but less timely Case-Shiller Home Price Index because the subprime-only mortgage tightening caused the median indicators to overstate actual pricing power. Now that the credit crunch is affecting the entire housing market, it’s possible that the size-adjusted median will once again start accurately reflecting what’s going on.
However, the tightening didn’t begin until August, while the August sales data reflects the closing of deals that were primarly made in July. Round two of the mortgage credit crunch probably won’t make itself fully known until we get next month’s housing data.
— RICH TOSCANO