The primary purpose of the Real Estate Market Reports Blog is to bring localized “on the ground” observations of real estate activity from around the United States. Too often, real estate reports are generated at national or state level, and they are often inaccurate due to the “blending” that must occur at the higher level. Today, we bring a very detailed analysis of a local market that can be viewed as a case study for any real estate market in the United States.
In the Tallahassee Real Estate Blog, we find a predictive model that correlates population and home sales. In todays blog titled “Discover A Simple Method To Accurately Predict Future Home Sales” we see analysis and a graph that helps explain the model.
In order to understand the entire model, visit the original post about predicting future home sales. In a nutshell, the graph above has some critical elements that you should understand, including:
- The horizontal axis, the dates run from 1991 (actual figures) to 2011 (projected figures).
- The population is represented by the dark blue fill and displayed on the right vertical axis. While all years are estimates from the U.S. census, the 2008-2011 still have to be verified in during the 2010 census. Many people are projecting an upwards adjustment to our population figures, which would result in an upward estimate of home sales using this model (theory).
- Non-discretionary buyers are an estimated amount each year and are represented in bright red of each vertical measurement.
- Discretionary buyers are an estimated amount each year and are represented in maroon of each vertical measurement.
- Total buyers are the combination of the bright red and maroon bars. For the years 1991 through 2007, these are real, measured figures. For 2008, I have annualized the January through August actual figures and this final number should be pretty close to what occurs in the Tallahassee housing market.
- The pink line represents the amount of home sales (total buyers) that the market “expected” each year, based upon the 2% of population equation. Since the market population is growing, we anticipate that over time, home sales will grow as well.
Please refer to “Discover A Simple Method To Accurately Predict Future Home Sales” to see the complete analysis.
