A Risk and Return Ratings (High, Medium or Low). The Cash-on-Cash Expected Return is linked to our forecast of rents. The Equity Expected Return is linked to our forecast of home prices.
B Chart of Home Price Increases. These are annual increases, measured every quarter. They indicate the recent strength of demand for all housing, homes and rentals. Increases above 6 percent show strong demand, below 3 percent they show weak demand.
C Chart of Job Increases. These are annual increases, usually measured every quarter but monthly during the pandemic. Job growth usually is a good indicator of future demand for housing, but during the pandemic it mainly shows how rapidly a market is recovering.
D Chart of Home Prices. The blue bars show the annual history of actual home prices, the red dots show a comparison ‘income’ price – linked to local income. If actual prices are well above the ‘income’ price, the market is over-priced and may be in a boom and bust cycle.
E Data Table. Average home price and monthly rent, the ratio of average home price to average annual rent, and our three-year home price and rent forecasts.