Collateral Analytics, a provider of automated valuation solutions and real estate analytic products for large lenders and appraisers, reveals a new market timing indicator identifies important turning points in the real estate market through ‘Buy-Sell Signals’ demonstrating significant change from a positive appreciation rate in nominal terms to a negative one and vice versa, the company announced in a release.
Using data from a variety of sources assembled by Collateral Analytics, the new research article includes descriptive results for a number of leading housing markets. This simple market timing indicator would produce substantially higher returns than most other approaches based on traditional economic data, not only, because it is more current but also because it allows buyers and sellers sufficient time to act, the release said.
“The method is based entirely on the home prices themselves which make the approach both simple and applicable to any geographic area or property type” Collateral Analytics President/CEO Dr. Michael Sklarz said in the release. “While developed originally for the stock market, we have found that the same approach can be applied, perhaps with more success, to the real estate market.”
The Collateral Analytics Buy-Sell Indicator tool is most beneficial in markets with higher price cycle amplitudes and significant price swings where investors can achieve significantly higher returns, while more than compensating for transaction costs, when compared to long term buy and hold strategies. Of note is that these include most of the larger and more widely followed housing markets in the U.S.
“Real estate markets, unlike the stock market, typically exhibit substantial momentum in both directions and this gives data-mined- informed buyers and seller’s sufficient lead time to beat the herd,” Sklarz said.