An analysis of economic drivers in the greater Truckee Meadows area and their affect on single-family home valuation.

摘要

This paper seeks to develop the first formal evaluation of the housing market value increases in the greater Truckee Meadows region. By combining both national and regional economic factors, as well as incorporating local sales and property characteristic elements, into the study, this paper hopes to create the first hybrid housing market model with both macro- and micro-economic factors as determinants for housing market valuation. Both additive and multiplicative variables are employed in the model development with minimization of ordinary least squares residuals of the annual percent growth by quarter is the focus. Evidence of a robust correlation between interest rates, as measured by the federal funds target in this study, and housing market value increase is found. Also in evidence is a relation between prior quarter sales activity and current quarter value shifts, as well as some less significant influence by population increases, inflation effects (as measured by the consumer price index), and income levels. Also discussed is prior literature on various components evaluated in the model development process and the methods used in the process.