CoreLogic economics analyst David Stiff looks to demystify some of the riddle of property valuation, diving deep into the data of price dispersion over time in a given market.
Stiff notes that every residential property is a unique bundle of physical characteristics (of both the housing structure and the lot) and location (proximity to jobs and schools and the attributes of the surrounding neighborhood). Here's one of his key take-aways:
The dispersion in individual home price appreciation will usually be larger in markets where houses and their locations are more dissimilar. Dispersion also tends to increase during housing market boom and bust periods since homebuyers and sellers have more difficulty pricing properties when there are rapid changes in market-level prices. Increased home price dispersion makes it more difficult to manage home price risk.