Sacramento Metro Real Estate
Composite Momentum
Intro
Using data from 52 zip codes, the price momenta are aggregated to show Momentum Swing and Spread. These views depict market movement, price variability, and potential future triggers.
Summary
This table summarizes the elements of momentum and the derivatives to show shifts in market behavior and “force”.
Whipsaw
My “Whipsaw Indicator”, similar but not identical to an EKG because of the granular elements (zip codes), tells me when the general direction (via momentum) is increasing, decreasing, or unchanged in the current month. When aggregate momentum is too high or too low, the consequences are usually more of the same.
Spread
The spread is the simple difference between the Maximum and Minimum momenta for a month and depicts the variability of price changes during the month. A low spread means there are smaller changes UP and DOWN.
Momentum
Showing the Median Price and its Momentum together makes it easier to explain how crossing the X axis “warns” the investor that the momentum is triggering a possible action. Because Momentum is not perfect, there is a time lag and, therefore, lost opportunity to either gain more or lose less from the actual peak/trough to the crossing of the X axis.
