ALEX's Monthly Trend Model compares expected monthly trend vs actual monthly sales statistics. It's the only source of ABOR specific monthly trend

OVERVIEW

ALEX Labs built this model "MODEL" to analyze actual single family residential sales compared to expected sales statistics based on monthlyl trend. By calculating expected monrhly trend, we can isolate the impact of the economy (national and local economic factors and local housing supply and demand) on specific Austin markets

Why did ALEX build it?: There are many real estate monthly trend models available but there is not one specific to Austin

What is the key take away?: For each of the geographic areas reported, we report actual statistics and provide a comparison to what the MODEL predicted. The difference is a general indicator about economic impact. So, we can easily identify Austin markets that are performing better or worse than expected

What monthly trend statistics are calculated?: Total Sales, Total Sales Volume, Median Net Sal Price, Median Net Sale Price per SF, and Days from Listing to Escrow (Cumulative Median Days on Market) 

How accurate is It?:  Across all statistical categories, the model is over 96% accurate

Who uses It: ALEX provides it on demand for ALEX Partners (Agents and Associate Brokers) and their clients. If a property to be listed or purchased is in an area modeled, the data is included in the Property Research and Analysis Reports for Clients and Agents. ALEX Studios incorporates it into trend discussions in Stat Packs and ALEX Blog posts. ALEX does not restrict its use

Variations caused by a small # of sales: Since the MODEL sometimes focuses on very small geographic areas, the number of sales can result in substantial swings month over month or year over year. In general, for any geographic area analyzed with less than 50 sales in a month, expect significiant variations

Sun City may be an exception: If an area is homogenus (home values are in relatively narrow range, the variations are expected to be less substantial. This should be true of Sun City in most months

DETAILS

Model description:  Seasonally Adjusted Exponential Smoothing Model. It is simplified version of Holt-Winters

Data: Austin Board of Realtors (ABOR) monthly data from Jan 2018 to Dec 2023. At the end of each year, it is updated

Data limitations: The MODEL is based on sales report to ABOR. The most common type of sale that may not be reported to ABOR are new home sales. Some builders post their homes on ABOR, others do not

Monthly data timing: Normally, data is downloaded on or after the 4th day of the following month to allow time to capture transactions reported after the end of the month. ABOR requires transactions to reported within three days of closing

Exponential Smoothing: It's a time series forecasting method that gives more weight to the recent observations. The degree of weighting decrease exponentially, hence the name

Exponential Smoothing Factor: α = 0.85. A value closer to 1 gives more weight to recent observations. A value close to 0 give more weight to historical observations

Seasonal Decomposition: By calculating the "Seasonal Index,” we're essentially decomposing the time series into its seasonal components. This allows us to understand and quantify the seasonality in the data

ALEX Analysts: Jeff Helton, Ph.D, Project Director; Teale Miller, Lead Consulting Analyst; Janez Novak, Senior Consulting Analyst; George Alexander, Project Manager

QUESTIONS?

If you have any questions, or would like a report for another geographic area please contact your favorite ALEX Partner, contact Diane Alexander at 713.591.9902 or at diane@alex.realestate or complete the form at the bottom of this page.