The leading market index uses an array
of factors to assess the relative health of
an individual market. The factors
include job creation, unemployment
claims, bankruptcy filings, and permits
for construction. The first two factors
provide an indication of potential
business expansion/contraction as well
as of labor market health and a leading indicator of multifamily rental growth.
Bankruptcy filings allude to the health
of the business environment, while
the permits data point to business
plans and have an indirect impact on
inventories.
The leading indicator is weighted
based on both the current measure as well as its recent trend or lagged
measures. These weighted measures
are then added to create a score.
This score is then ranked relative to
a fixed scale where a measure of 85
or better indicates a robust market,
75 to 85 a strong market, 65 to 75 an
average market, and a score below 65
coincides with a weak market.
(Click on above picture to enlarge)
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