Saturday, June 23, 2018

Silicon Valley Condo Market Continues on a Linear Growth Path

(Click on the image to enlarge)

The Silicon Valley Condo Market continues to trend up on a linear path. The trend is definitely linear, but not a perfect one as evidenced by the low r-squared. The 2-Mo Moving Average is also confirming the linear trend. While the big drop in December is ignored by both trendlines, they are however pointing to a breakout eclipsing the prior high of $850K. Even on a smooth basis, the market moved up from $700K to $850K, a whopping 21% growth in a year.

The normalized trend (bottom chart) is even more vigorous, moving up from $500/SF to $675/SF, an astounding 35% annual growth. Again, both trendlines are rejecting the trough and the peak at the long end of the curve. Nonetheless, the growth has been spectacular. Without the outliers (Dec-17 and Feb-18), the r-squared jumps to 0.907 with the slope steepening to a near-perfect linear trend (not shown).

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

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