This is then translated onto a year-on-year prediction:
On the graph above I get an estimate of close to -5.5% YOY change in the March Teranet HPI. I have been calling for between -6% and -4% on the Teranet HPI in February-March of 2013.
Monday, January 07, 2013
Fun With Predictors
Here is a fun predictor I use to guess near-term (i.e. 4-6 months out) price movements on the Teranet HPI. The model works by finding peak correlation between price changes and months-of-inventory, the best is shown below:
I then use a simple regression fit (I'm ignoring log fit for now) and play around with the regression window length and get minimized error post-2009 with an 8-month window. Since peak cross correlation is shifted we have the ability to "predict" price changes some time into the future, in this case 3 months ahead:
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4 comments:
What is the confidence interval around that point estimate?
Jesse, I was going to call you the Nate Silver of Van RE pricing but that would be a disservice to you. Clearly, Nate Silver is the Jesse of US Election Polling.
Jesse, I was going to call you the Nate Silver of Van RE pricing but that would be a disservice to you. Clearly, Nate Silver is the Jesse of US Election Polling.
Shock, not super high, I haven't run confidence intervals on the regression. But to eyeball it I'll say +/-1% at 80%.
Correlation is -0.9 on HPI-MOI, if that helps.
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