Raw vs Real Case-Shiller Index

One of the unique things I do here at RealEstateDecoded.com is that I publish an inflation-adjusted Case-Shiller Home Price Index.

You can see what’s really going on with home prices by looking at the Real, Inflation-Adjusted Case-Shiller Home Price Index.

  • Raw Case-Shiller Index makes it look like Chicago home prices are 40% above 2000.
  • Real Case-Shiller Index shows that Chicago home prices are a bit LOWER than in 2000.
Comparing Case-Shiller Home Price Index to Inflation-Adjusted Case-Shiller Home Price Index

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See both the Raw and Real views, click here.

Bubble View – Moving the Base Year from 2000 to 1995

A totally unique thing I do that I haven’t seen anyone else do is that I move the base year back to 1995 so you can see how the Great Real Estate Bubble develops from the very beginning. I call it the “Bubble View.”

Case-Shiller uses the year 2000 as their base year but the bubble started to form before then.

Look at the difference! You can see Los Angeles home prices had already been increasing fast for 3 years before 2000.

Comparing Case-Shiller Home Price Index Base Year 2000 to Case-Shiller Home Price Index with Base Year 1995

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See Bubble View (1995 Baseline) versions of the Case-Shiller data, click here.

Bubble View – Inflation-Adjusted

And, of course, I made a real, inflation-adjusted version of the Bubble View so you can see the real home price changes as the bubble forms, peaks, falls and rebounds.

Here’s the original Case-Shiller data next to the same data with a 1995 baseline and adjusted for inflation.

Comparing Standard Case-Shiller Home Price Index to Inflation-Adjusted Case-Shiller Home Price Index with Base Year 1995

Click to Enlarge

Best Way to Look at Case-Shiller Data

I think the Inflation-Adjusted Bubble View (1995 baseline) is the best view of the Case-Shiller Home Price Index because it tells the whole story from the beginning before the Great Real Estate Bubble started, and it tells the real story with real dollars, it doesn’t let inflation skew the story.

2 Pages of Case-Shiller Graphs

Now, it’s your turn to dive into the graphs and see what the data tells you about your city, your bubble, your current real estate market, compared to the other Case-Shiller cities and the USA as a whole.

  1. Original Case-Shiller Index & Inflation-Adjusted
  2. Bubble View (1995 baseline) Case-Shiller Index & Inflation-Adjusted

Start with the first graphs and end with the last and the best.

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