what are some variables to predict real estate
 

what are some variables to forecast/ predict housing prices and housing volumes at any given month..?

Real estate is a product of emotion lately, not logic. Good luck.

"When others are greedy, be fearful; when others are fearful, be greedy." --> stick to that and you'll make trillions.

Month to month is going to next to impossible.

Things to consider are things such as interest rate adjustments. Rates going up means prices are likely to have pressure on the downside. Interest rates going lower usually has an effect of stimulating the borrowing of funds. Low cost of borrowing means cheaper money and a greater level of affordability. This then creates a spark that moves prices upwards.

Big news relating to jobs and job spin offs. For example, prices will rise or have upwards pressure if there is a 10 billion dollar construction project in a city. The amount of the project is going to be related to the size of the city. Look no further than Detroit to see what happens when projects close or there is no work for the community.

Other things to consider is location and how this is related to other outside factors however this is a very difficult thing to peg and I'm not sure it has a huge part to do with prices in the short term or even long term. It can however allow something to remain delayed. An example of this would be Vancouver. The idea of 'rich asians' propping markets up is neither true or false. It has some merit in keeping prices higher or stable for a while but ultimately, prices will move where they are going to move regardless. It just buys time. The same can be said for those unwilling to buy in seriously depressed markets. Prices should rise but because nobody is willing to touch it, the price remains low for a longer period of time than is necessary.

At the end of the day, real estate is a VERY emotional purchase. I find it ironic how the thing in their life that costs the most is made by most people on almost all emotion. It is for this reason that the markets are irrational, because emotions are irrational.

Real estate, when looking month to month, is a hard thing for a stock and investment guy like me. Real estate moves MUCH slower than investment markets. The main reason for this is the amount of time it takes to sell a home. Another factor is that the housing market is a bigger market. Almost everyone owns a home so the mental shift of society or that geographic area can take a long time to tip the scales the other way.

Don't think about a roller coaster, think about a hot air balloon.

The thing slowly goes up. Month over month, it's going to pretty much float in the same direction. While there may be little things that make one month lower than another, the trends in real estate are long term and MOM values are not very useful. The economic is not something that violently moves from one end to the other. It's a gradual change. Using the balloon example, once the balloon runs out of fuel, it slowly starts going down.

The nice thing about humans is that we are emotional by nature. This emotion creates bubbles and bubbles can create a lot of money for those that are smart enough to think for themselves.

My favourite Warren Buffet quote! :thumbsup:

It also depends if you have a parachute to jump out of the balloon.

The US has non-recourse mortgages, meaning if you don't like the payments you can hand back the keys to the bank and never be bothered again about how much is left on the mortgage. This will tend to sink the balloon, as consumers have the power to walk away from homes that are worth less than the mortgages on them.

US consumers have a very good parachute and can/will jump anytime.

Canada has recourse mortgages. We cannot hand the keys back to the bank and walk away. The bank has the right to sue you for any costs in selling the house after giving back the keys, including any difference in value if the house sells for less than the mortgage. The bank can go after all your assets and even garnish your wages. You could declare bankruptcy, yet then you're losing all your assets too.

Canadian consumers have no parachute, they are stuck riding the balloon.