{"id":4318,"date":"2009-02-17T06:00:02","date_gmt":"2009-02-17T14:00:02","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=4318"},"modified":"2009-07-30T20:03:30","modified_gmt":"2009-07-31T03:03:30","slug":"bottom-calling-dollars-per-square-foot-linear-forecast","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2009\/02\/17\/bottom-calling-dollars-per-square-foot-linear-forecast\/","title":{"rendered":"Bottom-Calling: Dollars per Square Foot Linear Forecast"},"content":{"rendered":"<p>For our next forecast, let&#8217;s refer to a dataset that we&#8217;ve only gone to <a href=\"http:\/\/seattlebubble.com\/blog\/2008\/04\/10\/radarlogic-shows-seattle-msa-price-per-square-foot-dropping-at-17-per-year\/\" title=\"Radar Logic Shows Seattle MSA Price per Square Foot Dropping at 17% per Year\">once before on Seattle Bubble<\/a>: <a href=\"http:\/\/analytics.radarlogic.com\/radar-logic-home\/historical-data.aspx\" title=\"Radar Logic\">Radar Logic&#8217;s Residential Property Index<\/a>.<\/p>\n<p>Radar Logic analyzes home sales and produces a running index of sale prices in the Seattle metro area in terms of dollars per square foot.<\/p>\n<p>Here are our basic assumptions for the Dollars per Square Foot Linear forecast:<\/p>\n<ul>\n<li>The 2000 to early 2004 trendline for Seattle home prices represents a reasonable baseline.<\/li>\n<li>Prices on a $\/sqft basis will continue falling at present rate.<\/li>\n<li>The bottom will be 10% below the historical trend line.<\/li>\n<\/ul>\n<p>Given these assumptions, here&#8217;s a rough picture of what Seattle&#8217;s Radar Logic Residential Property Index would look like through late 2009:<\/p>\n<p style=\"width: 600px; margin: 5px auto; font-size: 0.8em; text-align: center;\"><a href=\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2009\/02\/bottom-calling-method-2_dol-sqft.png\" title=\"Bottom-Calling Method 2: Dollars per Square Foot Linear Forecast\" rel=\"lightbox[4318]\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2009\/02\/bottom-calling-method-2_dol-sqft-600x435.png\" style=\"border: 0; margin: 5px;\" title=\"Bottom-Calling Method 2: Dollars per Square Foot Linear Forecast - Click to enlarge\" alt=\"Bottom-Calling Method 2: Dollars per Square Foot Linear Forecast\" width=\"600\" height=\"435\"><\/a><\/p>\n<p>Using the Dollars per Square Foot Linear forecast model, Seattle-area home prices (as measured by Radar Logic) will hit bottom late this year to early next year.<\/p>\n<p>This method seems to give us a fairly reasonable prediction.  The historical trend (red dashed line in the chart above) represents home price growth of approximately 5% per year in the years just prior to the housing bubble.  Of course, it is certainly open for debate whether 5% annual growth is truly sustainable in the long-term, and whether 10% below that trendline is a reasonable bottom.  If you believe, as some do, that unsustainable price growth has been taking place since the late &#8217;90s, the bottom would obviously be much later and lower than shown above.<\/p>\n<p>Also note that this forecast method and the three that remain in Bottom-Calling Week do not forecast any further into the future than the bottom month.  Once the bottom is reached, the forecast is halted.<\/p>\n<p><span style=\"font-weight: bold; font-size: 1.2em;\">Method 2: Dollars per Square Foot Linear Forecast (Summary)<\/span><br \/>\n<b>Bottom Month:<\/b> December 2009<br \/>\n<b>Bottom Value:<\/b> 30.7% off peak<br \/>\n<b>Likelihood*:<\/b> 20%<\/p>\n<p><span style=\"font-size: 85%;\">* Likelihood is a totally subjective value assigned according to The Tim&#8217;s gut feeling.  Treat it accordingly.<\/span><\/p>\n<p><span style=\"font-weight: bold; font-size: 1.2em;\">Bottom-Calling Week on Seattle Bubble<\/span><\/p>\n<ul>\n<li>Introduction: <a href=\"http:\/\/seattlebubble.com\/blog\/2009\/02\/16\/bottom-calling-week-on-seattle-bubble\/\" title=\"Bottom-Calling Week on Seattle Bubble\">Bottom-Calling Week on Seattle Bubble<\/a><\/li>\n<li>Method 0: <a href=\"http:\/\/seattlebubble.com\/blog\/2009\/02\/16\/bottom-calling-week-on-seattle-bubble\/#method0\" title=\"Blind Optimism\">Blind Optimism<\/a><\/li>\n<li>Method 1: <a href=\"http:\/\/seattlebubble.com\/blog\/2009\/02\/16\/bottom-calling-inventory-based-forecast\/\" title=\"Inventory-Based Forecast\">Inventory-Based Forecast<\/a><\/li>\n<li><strong>Method 2: Dollars per Square Foot Linear Forecast<\/strong><\/li>\n<li>Method 3: <a href=\"http:\/\/seattlebubble.com\/blog\/2009\/02\/18\/bottom-calling-simple-mirror-forecast\/\" title=\"Simple Mirror Forecast\">Simple Mirror Forecast<\/a><\/li>\n<li>Method 4: <a href=\"http:\/\/seattlebubble.com\/blog\/2009\/02\/19\/bottom-calling-affordability-index-forecast\/\" title=\"Affordability Index Forecast\">Affordability Index Forecast<\/a><\/li>\n<li>Method 5: <a href=\"http:\/\/seattlebubble.com\/blog\/2009\/02\/20\/bottom-calling-san-diego-lag-forecast\/\" title=\"San Diego Lag Forecast\">San Diego Lag Forecast<\/a><\/li>\n<li>Conclusion: <a href=\"http:\/\/seattlebubble.com\/blog\/2009\/02\/20\/bottom-calling-so-wheres-the-bottom\/\" title=\"So Where's the Bottom?\">So Where&#8217;s the Bottom?<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>For our next forecast, let&#8217;s refer to a dataset that we&#8217;ve only gone to once before on Seattle Bubble: Radar Logic&#8217;s Residential Property Index. Radar Logic analyzes home sales and produces a running index of sale prices in the Seattle metro area in terms of dollars per square foot. Here are our basic assumptions for&#8230;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[206,8],"tags":[292,14,229],"coauthors":[],"class_list":["post-4318","post","type-post","status-publish","format-standard","hentry","category-features","category-stats","tag-bottom-calling","tag-predictions","tag-radar-logic"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Bottom-Calling: Dollars per Square Foot Linear Forecast \u2022 Seattle Bubble<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/seattlebubble.com\/blog\/2009\/02\/17\/bottom-calling-dollars-per-square-foot-linear-forecast\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Bottom-Calling: Dollars per Square Foot Linear Forecast \u2022 Seattle Bubble\" \/>\n<meta name=\"twitter:description\" content=\"For our next forecast, let&#8217;s refer to a dataset that we&#8217;ve only gone to once before on Seattle Bubble: Radar Logic&#8217;s Residential Property Index. 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