RABINDEX (RBX) provides a new method to COMPARE PRICING between 2 or more SINGLE FAMILY RESIDENCES.
The RABINDEX (RBX) can now help you measure the difference in PRICE of SINGLE FAMILY RESIDENCES (SFRs) . It is used as an INDEX to COMPARE HOUSES and the accompanying LAND in similar NEIGHBORHOODS, STREETS and even BLOCKS. It works best if you have at least 1 RECENT CLOSED SALE for comparison. If done correctly, it gives you the PRICE TRENDS in your area for 1) PRICE/HOUSING SQUARE FOOT, 2) PRICE/LAND SQUARE FOOT and 3) HOUSE PRICE MULTIPLIERS (HPMs), which is a combination of both. HOUSE PRICE MULTIPLIERS (HPMs) is the easiest way to to compare between the property in question and a recent closed sale. Here is an example of how the RABINDEX (RBX) works:
(HPM) Property in Question divided by (HPM) Recent Closed SALE = (RBX) Rabindex
Hypothetical example 206.1 / 236.4 = .872 (RBX) Rabindex -12.8% over 6 months time
The numbers can be annualized as well.
12 months / 6 months = 2.0 x -12.8% = -25.6% per year
This may become EXTREMELY IMPORTANT if we begin seeing significant PRICE DROPS this summer.
We will start with the following the areas of BEVERLYWOOD, MARINA DEL REY, WEST HOLLYWOOD, CULVER CITY, BEVERLY HILLS, CENTURY CITY, VENICE, BEL AIR, BRENTWOOD, RANCHO PARK, MALIBU, MAR VISTA, PACIFIC PALISADES and SANTA MONICA in this blog.
I will start posting (HPMs) and (RBXs) for these areas as soon as possible. Seeing how I have another "day job", it would great to have as many people as possible, posting local information here. Thanks !
For those unfamiliar with how to figure out (HPM) HOUSE PRICE MULTIPLIER, here is a formula to use :
(HSQFT) Housing Square Footage / (LSQFT) Land Square Footage = (HF) Housing Factor
(HF) Housing Factor x (SP) Sales Price = (HV) Housing Value
(HV) Housing Value / (HSQFT) Housing Square Footage = (P/SQFToH) Price per Square Foot of Housing
1.0 - (HF) Housing Factor = (LF) Land Factor
(LF) Land Factor x (SP) Sales Price = (LV) Land Value
(LV) Land Value / (LSQFT) Land Square Footage = (P/SQFToL) Price per Square Footage of Land
(P/SQFToH) + (P/SQFToL) = (HPM) House Price Multiplier
Now you have ways to value a HOUSE, LAND or BOTH......
Check the BEVERLYWOOD MELTDOWNS Post below for a real example of (HPM) House Price Multiplier and (RBX) Rabindex calculations.
Posts
6 comments:
For those that would just like the Straight Formula to use for calculating the (HPM) House Price Multiplier :
(HPM) House Price Formula is as follows:
HSQFT / LSQFT = HF
HF x SP = HV
HV / HSQFT = P / SQFToH
1.0 - HF = LF
LF x SP = LV
LV / LSFT = P /SQFToL
P /SQFToH + P / SQFToL = (HPM)
Here is the Straight Formula to use for calculating (RBX) Rabindex :
(HPM) Subject Property / (HPM)Recent Comparable = (RBX) Rabindex
Just added 2 new "Helpful Links" worth looking at:
Foreclosure Radar (A MUST SEE!!!)
and
California Forecast
Both excellent and worth your time. Especially Foreclosure Radar. Excellent graphics and very impressive!
APRIL NUMBERS out yesterday. Only one word describes it. HORRIBLE..
California Total # of Sales (-28.5%) Year over Year
California Total # of Sales (-12.2%) Monthly Decline !
So. Cal Total # of Sales (-28.9%) Year over Year
So. Cal Total # of Sales (-11.8%) Monthly Decline !
Monthly declines are ESPECIALLY TROUBLING because, sales are SUPPOSED to be seasonally INCREASING, as we finish Spring, and head into the busy Summer season.
So.Cal Total # of Sales is now at a 12 YEAR LOW (1995).
Here are the LA Numbers for April:
TOTAL NUMBER OF SALES
Los Angeles County (-22.2%) Year over Year
Who is using these formulas ? do feel they are useful? Are they valid in your area? With prices starting to decline will you find them helpful ?
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