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Real Estate Prices --- Leading Indicators

• Hi There! I was goofing off today, and started looking through www.craigslist.com for real estate. I looked at 11 different cities from San Francisco to Phoenix to Washington, D.C. Mini-Eureka moment! I noticed the number of lease-options available has increased significantly in each and every city. 11 of 11 towns! The last time I checked www.craigslist.com was 5 months ago. This observation sparked my rusty brain cells. There must be leading indicators for real estate, in the same way there are leading indicators for stocks. Here's a list of possible danger signals for real estate off the "top of my head": 1. Increasing lease-options 2. Increasing number of days on the market 3. Increasing number of unsold homes in a city 4. Decreasing ratio of Asking Price/Transaction Price 5. Increasing number of homes on the market more than 120 days 6. Decreasing number of mortgage applications 7. Increasing number of newspaper classified ads for real estate I'm not a real estate guy. But I'm sure some brilliant professor has devised a computer model to predict when real estate prices will decline 6-12 months hence. A 5-star answer would be 5-10 additional leading indicators for real estate. No background material needed. (However, if you happen to find an objective study on leading indicators then I would love to take a look at that, too.) All comments greatly appreciated! Thanks. ron P.S. Please note that indicators like "Forecasted Job Growth" or "Forecasted Property Tax Receipts" won't help much, precisely because they are forecasts and not hard data. The best indicators would involve hard numbers that can be observed right now, and used to make comparisons. EXAMPLES: 1. Days on the market for San Francisco versus days on the market for Phoenix. 2. Days on the market for San Francisco in April 2005 versus days on the market in San Francisco in January 2002. (This question doesn't involve specific numbers or specific cities. Rather, it involves the kind of indicators one might observe. Thx.)

• Answer:

  Hi! Thanks for the question. The National Association of Realtors provides a list of real estate indicators that one can analyze to indicate some trends. Here are some of the indicators that they follow: - Existing Home Sales - Pending Home Sales Index - New Home Sales - Housing Starts - Housing Affordability - Mortgage Rates - Mortgage Applications ?Latest Economic Indicators? http://www.realtor.org/Research.nsf/Pages/EcoIndicator The US Census website provides a historical basis for its leading indicators for real estate. The statistics are from 1900 to 2002. The indicators mentioned in the Census website are the following: - New housing units started - New one family houses sold - Existing one family houses sold - Manufacturing shipments - Index of industrial production - Manufacturing index - Retail Sales - Exports Basis - General Imports ?No. HS-40. Economic Indicators for Construction, Real Estate, Manufacturing, Retail, and Foreign Trade Sectors: 1900 to 2002? http://www.census.gov/statab/hist/HS-40.pdf Finally, here is an academic study about real estate prices. ?Real Estate Prices and Economic Cycles? http://urbanpolicy.berkeley.edu/pdf/Q_IRER99PB.pdf Search terms used: ?real estate? housing economic indicators studies real estate prices filetype:pdf I hope these links would help you in your research. Before rating this answer, please ask for a clarification if you have a question or if you would need further information. Thanks for visiting us. Regards, Easterangel-ga Google Answers Researcher