Veros Real Estate Solutions has announced it is making its proprietary home price index, VeroHPI, available for commercial use for the first time. Now lenders, secondary marketers, servicers and analysts will have direct access to information previously available only in Veros products. This information includes sophisticated analytics with a repeat sales index, which immediately improves decision-making regarding residential property price trends in markets across the country.
VeroHPI is constructed using a methodology that is widely accepted as one of the most accurate ways to determine residential real estate price changes. These models were created nearly 15 years ago at Veros, and today they are among the core methodologies used to fuel the VeroVALUE automated valuation model (AVM), with its documented industry-leading accuracy. The index data provides robust trending logic, offers national coverage and is available at the CBSA (county-based statistical area) or FIPS (Federal Information Processing Standard) levels.
“This data has never been made available for use outside of Veros’ own analytic tools and solutions,” saids Eric P. Fox, vice president of statistical modeling and economics for Veros. “In addition to the repeat sales models, our HPI is fueled by ‘purchase only’ transactions. This filter offers yet another measure to ensure accuracy and clarity that can be lost if other sources of data, such as refinance appraisals, are used,” Fox said.
Veros’ repeat sales methodology compares two or more sales prices of the same property over a lengthy period of time to ensure that the price changes measured are as accurate as possible. Indices that simply fit a model to sales prices of a large number of sales prices over time are open to errors during periods of market shift–such as when more lower priced entry-level homes are being sold–giving the impression, for example, that a market is depreciating when it may be flat.
“Simplistic methodologies are not good enough for today’s more complex market,” said Fox. “For a number of years we have received requests for these highly accurate indices and we’re pleased to be able to make the tool available to the industry.”
The VeroHPI data has powered the company’s proprietary analytics with extraordinary results since the company’s inception. VeroVALUE, a prime example, is consistently one of the nation’s top performing AVMs, as independently verified by multiple third-party testing entities as well as by large national lenders who perform recurring blind testing with the company on a routine basis.