Tuesday, May 22, 2018

Miami Housing Market Shows Bullish Trend

- Intended for Students/New Analysts to Learn Analytics -

(Click on the image to enlarge)
Generally, these two charts - normal and normalized - project very similar trends. In this case, they are at considerable variance.

The Monthly Median Price trend has tapered, remaining directionless since October, without forming any meaningful support. On the other hand, the normalized SPSF continues a bullish upward trend, breaking out of the $185-$195/SF congestion, even eclipsing the $195 resistance.

Although tracking the Monthly Median Sale Prices is the industry standard, it must be studied alongside the normalized trend to take informed business decisions. Moving average is another option as it provides a level of smoothing. When the time series is extended (24+ months), quarterly provides a better basis. 

While constructing the SPSF trend, one must make sure that the Bldg SF (heated) remains well within the 4-5% margin. In the Miami example, the monthly SFs ranged between 1,563 and 1,668, around the overall median of 1,619 (well within the 4% range).

Note: This analysis covers City of Miami, not Miami-Dade county. 

- Sid Som, MBA, MIM
President, Homequant, Inc.

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