Name: Wan Khaidir Bin Wan Omar

ID: 2019936775

INDIVIDUAL ASSIGNMENT 1 - CASE 2.3 HOME AND CONDO PRICES

The file C02_03.xlsx contains an index of home prices and a seasonally adjusted (SA) version of this
index for several large U.S. cities. It also contains a condo price index for several large cities and a
national index. (The data are explained in the Source sheet.) Use the tools in this chapter to explore
these data, and write a report of your findings. Some important questions you can answer are the
following: Are there trends over time? Are there differences across cities? Are there differences across
months? Do condo prices mirror home prices? Why are seasonally adjusted indexes published?

ANSWERS:

1) Are there trends over time?

To analyze the trends over time, the most suitable method to get the overview of the data trends is
by using a line chart in Microsoft Excel.

The trend of the cities obtained for the Home Price Index Not Seasonally Adjusted (NSA) is shown
below:
Composite-20
Home Price Index NSA
Composite-10
4500.00
Seattle
Dallas
4000.00
Portland
Cleveland
3500.00
New York

3000.00 Las Vegas

Charlotte
2500.00 Minneapolis
Detroit
2000.00 Boston
Chicago
1500.00 Atlanta
Tampa
1000.00
Miami
Washington DC
500.00
Denver
San Francisco
0.00
San Diego
Feb-1994

Sep-2009
Feb-2011
Sep-1992

Aug-2002
Jan-1987

Jul-1995

Jan-2004

Jul-2012
Oct-1999

Oct-2016
Mar-2001

Dec-2013
Dec-1996
Nov-1989

Nov-2006
Jun-1988

Jun-2005
Apr-1991

Apr-2008

May-2015
May-1998

Los Angeles
Phoenix

It is clearly observable from the data that there is an increasing trend from January 1987 to November
2006. November 2006 showing the peak time and then the trend again starts decreasing gradually
until July 2012 and starts to increase again. The highest price index can be observed for Composite-
20, while the lowest for Pheonix.

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The trend of the cities obtained for the Seasonally Adjusted (SA) Home Price Index is shown below:
Composite-20
Home Price Index SA
Composite-10
4500 Seattle
Dallas
4000 Portland
Cleveland
3500 New York
Las Vegas
3000
Charlotte
Minneapolis
2500
Detroit
2000 Boston
Chicago
1500 Atlanta
Tampa
1000 Miami
Washington DC
500 Denver
San Francisco
0 San Diego
Jan-1987

Jan-1991

Jan-1999

Jan-2003

Jan-2011
Jan-1995

Jan-2007

Jan-2015
Sep-1989

Sep-1997

Sep-2001

Sep-2009

Sep-2013
Sep-1993

Sep-2005

Sep-2017
May-1988

May-1992

May-1996

May-2000

May-2004

May-2008

May-2012

May-2016
Los Angeles
Phoenix

It is clearly observable from the data that there is an increasing Seasonally Adjusted trend from
January 1987 to September 2005. September 2005 showing the peak time and then the trend again
starts decreasing gradually until May 2012 and starts to increase again. The highest price index can be
observed for Composite-20, while the lowest for Pheonix.

The trend obtained of the cities obtained for the National Index NSA is shown below:

National Index NSA

200.00
180.00
160.00
140.00
120.00
100.00
80.00
Index
60.00
40.00
20.00
0.00
Q1 - 1987
Q2 - 1988
Q4 - 1989
Q2 - 1991
Q3 - 1992
Q1 - 1994
Q3 - 1995
Q4 - 1996
Q2 - 1998
Q4 - 1999
Q1 - 2001
Q3 - 2002
Q1 - 2004
Q2 - 2005
Q4 - 2006
Q2 - 2008
Q3 - 2009
Q1 - 2011
Q3 - 2012
Q4 - 2013
Q2 - 2015
Q4 - 2016

It is clearly observable from the data that there is an increasing National Index trend from Q1- 1987
to Q4-2005. Q4-2005 showing the peak time and then the trend again starts decreasing gradually.
Again a dip can be observed in Q3-2012 and then rise again afterwards.

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The trend of the cities obtained for the National Index SA is shown below:

National Index SA
200.00
180.00
160.00
140.00
120.00
100.00
80.00
Index
60.00
40.00
20.00
0.00
Q1 - 1987
Q2 - 1988
Q4 - 1989
Q2 - 1991
Q3 - 1992
Q1 - 1994
Q3 - 1995
Q4 - 1996
Q2 - 1998
Q4 - 1999
Q1 - 2001
Q3 - 2002
Q1 - 2004
Q2 - 2005
Q4 - 2006
Q2 - 2008
Q3 - 2009
Q1 - 2011
Q3 - 2012
Q4 - 2013
Q2 - 2015
Q4 - 2016
It is clearly observable from the data that there is an increasing Seasonally Adjusted (SA) National
Index trend from Q1- 1987 to Q4-2005. Q4-2005 showing the peak time and then the trend again
starts decreasing gradually. Again a dip can be observed in Q3-2009 and then rise again after Q3-2012.

The trend obtained of the cities obtained for the Condo Index NSA is shown below:

Condo Index NSA

350.00

300.00

250.00
Los Angeles
200.00
San Francisco
150.00 Chicago

100.00 Boston
New York
50.00

0.00
Jan-95
Jul-96
Jan-98
Jul-99
Jan-01
Jul-02
Jan-04
Jul-05
Jan-07
Jul-08
Jan-10
Jul-11
Jan-13
Jul-14
Jan-16
Jul-17

It is clearly observable from the data that there is an increasing Condo Index trend from Jan-95 to Jan-
07. Jan-07 showing the peak time and then the trend again starts decreasing gradually. Again a dip
can be observed in Jul-11. Chicago has a lowest trend, whereas, Los Angeles shows the highest trend.

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The trend obtained of the cities obtained for the Condo Index SA is shown below:

Condo Index SA
350.00

300.00

250.00
Los Angeles
200.00
San Francisco
150.00 Chicago

100.00 Boston
New York
50.00

0.00
Jan-95
Jul-96
Jan-98
Jul-99
Jan-01
Jul-02
Jan-04
Jul-05
Jan-07
Jul-08
Jan-10
Jul-11
Jan-13
Jul-14
Jan-16
Jul-17
It is clearly observable from the data that there is an increasing Seasonally Adjusted Condo Index trend
from Jan-95 to Jul-05. Jul-05 showing the peak time and then the trend again starts decreasing
gradually. Again a dip can be observed in Jul-11. Chicago has a lowest trend, whereas, Los Angeles
shows the highest trend.

2) Are there differences across cities?

The result obtained for the differences in cities for Home Price Index NSA is shown below:

Home Price Index NSA

Mean
180
160
140
120
100
80
60
40
20
0
Portland

Charlotte

Detroit
Atlanta
Washington DC

San Francisco

Phoenix
Boston
San Diego

Denver
Chicago
Seattle

Las Vegas

Cleveland
Composite-20

Miami
Los Angeles

Composite-10

Dallas
New York

Tampa

Minneapolis

There are differences across the cities, with Composite-20 showing the highest mean and Detroit
showing the lowest mean.

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The result obtained for the differences in cities for SA Home Price Index is shown below:

Home Price Index SA

Mean
180
160
140
120
100
80
60
40
20
0

Portland

Charlotte

Detroit
Atlanta
Washington DC

San Francisco

Phoenix
Boston
San Diego

Chicago
Denver
Seattle

Las Vegas

Cleveland
Composite-20

Miami
Composite-10
Los Angeles

Dallas
New York

Tampa

Minneapolis
There are differences across the cities, with Composite-20 showing the highest mean and Detroit
showing the lowest mean.

The result obtained for the differences in cities for Condo Index NSA is shown below:

Condo Index NSA

Mean
200
180
160
140
120
100
80
60
40
20
0
Los Angeles New York San Francisco Boston Chicago

There are differences across the cities, with Los Angeles showing the highest mean and Chicago
showing the lowest mean.

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The result obtained for the differences in cities for Condo Index SA is shown below:

Condo Index SA
Mean
200
180
160
140
120
100
80
60
40
20
0
Los Angeles New York San Francisco Boston Chicago

There are differences across the cities, with Los Angeles showing the highest mean and Chicago
showing the lowest mean.

3. Are there differences across months?

The result obtained for the differences across months for Home Price Index NSA is shown below:

Home Price Index NSA Phoenix

Jan-17 VS Feb 17 Los Angeles
San Diego
300.00 San Francisco
Denver
Washington DC
250.00 Miami
Tampa
200.00 Atlanta
Chicago
Boston
150.00 Detroit
Minneapolis
Charlotte
100.00 Las Vegas
New York
Cleveland
50.00 Portland
Dallas
Seattle
0.00 Composite-10
Jan-2017 Feb-2017 Composite-20

2 months were selected which are Jan-2017 and Feb-2017 to observe the differences. From the
histogram, we can conclude that there is no difference across the months since the bar graph shows
similar trend for the 2 months.

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4) Do condo prices mirror home prices?

The result obtained for the for Home Price Index SA compared with Condo Price Index SA is shown
below:

Home Price SA
300.00

250.00

200.00
Los Angeles
150.00 San Francisco
Chicago
100.00
Boston
New York
50.00

0.00
Jan-2001

Jan-2004

Jan-2010

Jan-2013
Jan-1995

Jan-1998

Jan-2007

Jan-2016
Jul-2002

Jul-2011
Jul-1996

Jul-1999

Jul-2005

Jul-2008

Jul-2014

Jul-2017
Oct-1995

Oct-1998

Oct-2001

Oct-2004

Oct-2007

Oct-2010

Oct-2013

Oct-2016
Apr-1997

Apr-2006

Apr-2015
Apr-2000

Apr-2003

Apr-2009

Apr-2012

Condo Price SA
300.00

250.00

200.00
Los Angeles

150.00 San Francisco

Chicago
100.00 Boston
New York
50.00

0.00
Jan-95

Jan-98

Jan-01

Jan-04

Jan-07

Jan-10

Jan-13

Jan-16
Jul-96

Jul-02

Jul-08

Jul-14
Jul-99

Jul-05

Jul-11

Jul-17
Oct-95

Oct-01

Oct-07

Oct-13

Oct-16
Oct-98

Oct-04

Oct-10
Apr-97

Apr-03

Apr-09

Apr-15
Apr-00

Apr-06

Apr-12

It can be observed that Condo prices mirror Home prices since the trend lines shows the same pattern.

5) Why are seasonally adjusted indexes published?

Seasonally adjusted indexes are published in order to factor out seasonal effects on the price data,
gathered each month to observe increases or decreases to inflation. This provides users a more
accurate depiction of price movements and void of inconsistency that can occur during specific
seasons.

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Recommendations

When you are given a set of data and asked to analyze the trend across many years, it is recommended
to use trend line chart, provided in excel as part of analysis tools. Using trend line allows us to get the
overview of the likely trend by transforming big amount of data and plot the data on the chart.

Conclusion

Using trend line and histogram is the best way to analyze the trend over a period of time given a set
of data. Based on the analysis above, the home price shows almost perfectly similar trend against
condo price in US. Even when the data is adjusted to depict changes in seasonal factors, using the
trend line and sets of histograms, similar trend can be observed for both home and condo prices.