LPS Launches New Home Price Index

""Lender Processing Services, Inc."":http://www.lpsvcs.com (LPS), a Jacksonville, Florida-based provider of technology and services to the mortgage industry, announced Tuesday the launch of its proprietary Home Price Index (HPI).
The new index, developed by LPS Applied Analytics, measures changes in property values of residential real estate at different geographic levels, including state, metropolitan area, county, and ZIP code. Variance is values can also be analyzed based on types of properties, loans, and transactions. According to LPS, its HPI is unique in that it provides the option to include or exclude REO sales.
LPS' HPI leverages the company's own real estate database that compiles data directly from County Recorder and Assessor offices and includes property characteristics and ownership transfers on 80 million owner-occupied residences. LPS said its database covers 92 percent of all housing activity in the country.
The company uses a repeat sales model to value homes, taking into consideration changes in the mix of houses sold over time. With this method, LPS explained, the changes in types of homes that sell over time (for example, larger or smaller homes) do not improperly impact the HPI.
Nima Nattagh, Ph.D., SVP at LPS Applied Analytics, said, ""The LPS Applied Analytics HPI offers an inexpensive, quick, and accurate method for marking-to-market property values. Our new HPI complements LPS Applied Analytics' powerful suite of automated, desktop, and field valuation products to create the ideal valuation and risk management solutions for originators, capital markets professionals, and servicers.""
In March, LPS announced ""findings from a study"":http://www.lpsvcs.com/NewsRoom/IndustryData/Pages/default.aspx of changes in regional home prices between 2007 and 2008 in the nation's top housing markets. This study, which used LPS' proprietary HPI that can include and exclude REO sales, showed that the gap between REO sales prices and the rest of the market was very slim prior to 2007, but is growing at an accelerating pace.