LINK, one of the two MLS systems that serve the Boston market, routinely holds a lecture series for its members and guests that cover a wide range of real estate related topics. The most recent lecture took place at the ultra-luxury Mandarin Oriental in Boston’s Back Bay. The keynote speaker was Karl Case, one of the founders of the Standard & Poor’s Case-Shiller Home Price Indices, which measure the residential housing market, tracking changes in the value of the residential real estate market in 20 metropolitan regions across the United States.
In essence, the index covers homes that have resold, typically in suburban markets, but does not include condos or new construction sales (only repeat sales). As Karl Case opened the microphone up for questions following his keynote address, local broker Kevin Ahearn raised the concern that Case’s index does not reflect downtown Boston, as the index does not include condos (the overwhelming majority of downtown Boston’s housing stock) nor new construction sales. Following the session, Case was quoted as saying that Ahearn “simply doesn’t like anybody who says prices go down – and I say they have”.
It’s rather difficult to take a national or regional trends pitch into the heart of downtown Boston, and while Case suggested that 2010 would be a good year, members of the audience appreciated the message, but realized that the debate highlights the hyper-local nature of real estate, and the potential dangers of aggregating data and drawing conclusions about a local market from regional or national data trends that do not capture its local nuances.
LINK founder Debra Taylor Blair said the (downtown) Boston condominium market has fared much better than suburban single0family home sales (the latter being what the Case-Shiller index tracks).
Keith Munsell 
While I agree that leaving condos out of the housing market I still think the Case-Shiller index misses an important metric. If someone buys a house for 500k and puts 50k worth of improvements into it and then sells it for 550k the Case-Shiller index would use that 50k as appreciation when in reality there has been no appreciation at all.
While Kevin Ahearn’s assertation that condos should be included I wonder what he has to say about new units. Usually these are pumped in at the high end and actually very much inflate what would normally be year over year numbers.
My point is not that the Case-Shiller index is wrong – rather, it’s mearly one more way to gauge what the market has done. There are many ways to measure the market and I think Case-Shiller when combined with measures like the market velocity (number of months to clear the existing inventory), etc.
I do agree that most real estate agents (even the good ones) always think the market is better than it is. If your income was based on it being good then you’d also be one to overly optimistic.
So why all the references to a number we can’t really draw rigorous conclusions from. Case Schiller may be OK for Lexington but not for Boston. Last year Boston sold 4000 condos and only 1000 single family homes. So although its perhaps nice to know that the number of single family homes is doing this or that, the number its not really a number we can use when speaking generally about Boston Home sales.