Inflation Adjusted Home Price Index

Inflation Adjusted Home Price Index

– An “index” is an easy way to compare different markets over time (i.e. – cumulatively, rather than annually or quarterly) RELATIVE to each other. An index takes a year (any year) and assigns a value to home prices for that year (say ‘100’). That’s called the ‘base year.’

Inflation Adjusted Annual Home Price Appreciation %

Inflation Adjusted Annual Home Price Appreciation %

– This is the key metric we use for most TA because it strips out inflation. We do this to measure the true Supply & Demand forces.

– One way to think about this is if you were on a diet and weighed yourself every day –

Home By Home Price Data

Home-by-home price data doesn’t (yet) exist on a sub-MSA break-out level.

For some very large MSA’s (such as New York, Chicago, etc.), I’m attempting to get access to more detailed information via a Freedom of Information Act filing. This is an expensive and slow process… but worth a try!

HousingAlerts tracks actual home price movements for all 379 inpidual “Metropolitan Statistical Areas” (or MSA’s) as defined by the U.S.

Dynamic Real Estate Appreciation Map (D.R.E.A.M.) Tool

Questions:

I’m looking at the DREAM (Dynamic Real Estate Appreciation Map) National Display for 4th QTR 2014.

Is the color matching of the two colors present in South Dakota [One a light blue and the Second a lighter-whiter blue] accurate from the Legend?

It appears that the light blue 3-6% color is what is present in the Black Hills region (western end of the state) and in Sioux Falls (at the eastern end of the state).

Cities or Localities where Prices are Rising

Question: 

In the Metro Maps I noticed the map shows where housing prices are rising and falling but doesn’t give detailed info about which towns or cities are in those areas with the various color codings. How can I pinpoint the cities or other localities where prices are rising?

Answer:

First off –

CAGR (Compound Annual Growth Rate)

CAGR (Compound Annual Growth Rate)

This is a useful measure of growth over multiple time periods. It can be thought of as the growth rate that gets you from the initial investment value to the ending investment value if you assume that the investment has been compounding over the time period.

Annual Home Price Appreciation %

Annual Home Price Appreciation

– This is Inflation Adjusted Annual Home Price Appreciation % plus inflation. It’s what is normally quoted in the media.

Appreciation is the increase in a home’s value over time. … A home’s appreciation is calculated based on the fair market value of comparable homes for sale in the neighborhood.

Market Rankings Gauges

An easy way to identify the hottest markets is to simply look for those scoring in the highest percentiles compared to all the other markets. A score of “90” means this market is higher than 90% of all markets for that particular criteria or score.

Master Score – This is the best single indicator (if you only want to look at ONE scoring element).

Market Scoring Report

On the Market Scoring Report, you can check the market indicators of your chosen market showing the trends from weak to strong or vice versa.

You can also get ‘Details’ by clicking on right side of the indicator and you can also view the Charts.

The chart you see with buy and sell signals is actually a chart for annual APPRECIATION RATE (not a chart of real estate VALUES).

Default/Average/Best Quarter Looking Back Ratio

Question:

Is there a default/average/best quarter looking back ratio to use when using the moving averages #1 and #2? Depending on the length of time I look back will give me a different graph (green line/red line cross over). Is this true, where am I going wrong?

Answer:

The graphs **should** have different crossovers when using different MA periods,

Changing Chart Line Color

QUESTION:

I am red/green color blind and have found that I’m having problems differentiating on the market charts. Is there a way to make the colors more vivid or add some type of another indicator in the settings?

ANSWER:

Is the problem most acute when looking at the charts and trying to differentiate between the thin red/green Moving Average (MA) lines or does it also cause a problem seeing the round red/yellow/green STAR icons?

Moving Average Time Frames

Question:

“You use the 10 and 20 quarter moving average lines in your training videos. However, by the time they cross, the market has already moved substantially, thus risking giving up a lot of profit by waiting to sell, or risking not getting a good price by waiting to buy. Would it be more prudent to use shorter time frames for moving averages?