Forbes' New Luxury Housing Index

Forbes Magazine has created a new "Luxury Housing Index" to track the real estate market in the 500 most expensive zip codes in the U.S.

Forbes rightly points out that most housing indexes cover too many segments with too broad of a brush. As we know, all real estate is local. Or as they point out about San Francisco:

• The San Francisco MSA, for example, might be down 20%, but that number includes prices in the city of San Francisco, where properties generally hold their value; Vallejo, a bankrupt city in the North Bay; Oakland, which has been devastated by foreclosures, and depending on the index you use, San Jose--a city of over 1 million people on its own.

Forbes says they plan to update it weekly. But as I've repeated time and time again, it really only makes sense to track these things quarterly. Their first chart proves the point. One month moves are totally misleading: