New method reveals true house price inflation, impacting real estate markets.
The article compares different methods for measuring house price inflation in a small Dutch town from 2005 to 2008. They looked at ways to calculate a house price index using sales data, including techniques like stratification, hedonic regression, and land vs. structure breakdown. The researchers found that the additive hedonic regression model, which separates land and structure prices, can be useful with certain constraints. They also discussed challenges in creating an index for the overall housing market using sales data.