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Monarch Group LLC
Dana Point, California
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ED ROSS
Ed Ross is a nationally known real estate
trending expert, investor, wealth coach and author. Ed shares to
thousands
each month real estate purchase and sales strategies with
his books and the world’s most popular real estate forecasting
web
site called
edsforecast.com.
His material was written to
permit any property owner, buyer and seller a method of
succeeding
regardless of the market trend. He is a regular news commentary guest
on radio and television networks.
Ed Ross holds a Bachelors of Science in Accounting and he has been a
licensed Real Estate Broker since 1991. Ross
made his fortune in real
estate. He has over 20 years experience in being a real estate
entrepreneur, past director of
Asia Pacific for a large multinational
software company and a former CEO of a dot com company in Orange
County, California.
A unique blend of knowledge in business, software
and real estate was the basis behind his success in property
purchasing
and investing.
Ross has managed and owned over 200 properties. He has custom
built, renovated and personally rented over 100 houses,
apartment and
commercial, retail and industrial properties. He still owns and
manages a substantial portfolio consisting of
single family
residences, apartments, retail and commercial buildings.
Ed Ross has first hand experience with the last real estate slow down
in the early 1990's. He recognizes that during a slowing
real estate
trend people need tools that are fast and easy to use. Now he shares
his knowledge and tools across the nation
to permit others to emulate
his success.
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FORECAST MODEL
Our Econometric Model is a forecast
visual representation taken from mathematical formulations that
predicts a real estate
property location in terms of forecast
value.The higher a forecast number, the greater chance of
property appreciation. In
converse, the lower the forecast, the
greater risk of future price deceleration. We all strive to
purchase properties where an
ample amount of buyers will be
present when it comes time to sell. A high forecast is an
indication that buyers will be plentiful.
In simpler terms, you
will be able to apply any property to the model and predict the
strength of Location, Location, Location.
Any good
model has an easy mental and visual impact to
the user. Our Model is named "The Spill Zone Model
" and
uses a
metaphor of rain to further simplify the
model’s visual understanding. The model
identifies the percentage chance of "rain,"
also
know as the percentage of forecast "buyers" for
your property. Traditional supply and demand
rules in economics tell
us that the more buyers
(demand) we have for our property, the greater
the price (appreciation). Therefore the higher
the forecast
for rain (buyers), the higher the
prediction for future property appreciation.
Why call it "The Spill Zone"?
Just as your local news station forecasts weather
for your state, county and local area, The Spill Zone Model
will do the same and
take the forecast one step further to include
your property’s neighborhood and surrounding area (locality) forecast.
Each raindrop
is equivalent to a buyer. The higher the forecast for
raindrops, the more buyers expected over the next three years. A spill zone is
created when an overabundance of
buyers are in one area. The excessive buyer demand for purchasing
property can create a shortage
of available "for sale" inventory in a
given area. The limited supply of real estate inventory "for sale"
forces many buyers to purchase in
adjacent geographical areas where
demand is slightly lower. Thereby create a spill of buyers into the
adjacent area. A spill can occur
when an individual neighborhood is
extremely desirable which makes the adjacent neighborhood more
appealing. A spill can also
occur at the city or state level. This
spill effect creates additional buyer demand for your modeled
property. When a property or adjacent
geography is impacted by high
demand we refer to this as being in "The Spill Zone."When a property is in "The Spill Zone" it has the
likelihood of good appreciation over the next 36 months. This sounds
simple and it is. However, a small amount of time is required to
answer the prompted question to receive the final analysis. All data
are completely confidential. Any property with a forecast of over 80%
is
considered in "The Spill Zone." In this instance the forecast is
predicting ample buyers with healthy appreciation over the next 36
months. Anything under 80% is not considered in "The Spill Zone" and
may be subject to limited appreciation or possible price
deceleration.
Brief background on
econometric model.
You will find econometric models used in just about
every form of monetary evaluation which impacts just almost every
company in the
United States. The results are measured in terms of
inflationary standings, interest projections, government spending and
almost every
form of investing including real estate. Just turn on
your local business news television station and for certain will hear
about the impacts
on economic numbers and projections. What is unique to real estate is that most of us
just do not know where to easily access a forecast.
Sure we can
read a brief article in a newspaper that will tell us what the current
trend it and the future projection but we usually have to dig
real
hard to find a specific form of data that is meaningful to our own
real estate holdings. Luckily, this is not necessary anymore. Included
in
Edsforecast.com are 5 year projections for over 350 metropolitan areas
and a 3 year zip code -property specific forecast on over 60 million
properties within the USA. The forecast is sourced and created by Monarch
Group LLC which owns and operates www.edsforecast.com.
Over
dozen economists, econometrists, and real estate professionals share
forecast information derived from inputs of various data sources
that
are fed into the econometric model. These include but are not limited
to the following: U.S. Census Bureau, Federal Bureau of
Investigation,
Uniform Crime Reports, Bureau of Labor
Statistics-Consumer Price Index, Consumer Expenditure Survey, Index
Office of Housing Economic
Oversight, National Association of
Realtors, Moody’s Economy.com, National Association of Home Builders,
State Association of Realtors,
Ed Ross, edsforecast.com personnel and
the Expert Metropolitan Board.
How accurate is the
forecast?
A real estate forecast is a scientific prediction
based on the econometric model. The complexity and interrelationships
between its variable is to
reduce error and increase the probability
of accurate predictions. That being said, it is not perfect. The best
way to measure the accuracy of the
economist model is to review how
historical results have matched actual results. In our case the
predictions in edsforecast.com are provided by
many resources and when
a resource lacks historical accuracy we use the Expert Metropoliitan
Board, as described earlier, to adjust or select a
new modeler. Our
on-line results have been historically measured and challenged against
actual real estate appreciations and depreciations for
the past five
years. Edsforecast.com has achieved tremendous results on accuracy of
the metro areas released. The results are as follows; 1) 69%
of all
annual metro results have been predicted with an accuracy of five
percent margin of error. This means that if the forecast for one metro
area
showed an increase in appreciation of 2% edsforecast.com results
were within the range of 1.9% to 2.1%. This is an incredible accurate
prediction.
2) 28% fell within an accuracy of 5% to 20%. Still is
still a very accurate predication. 3) The remaining 3% were over 20%.
This means just a handful
of the metro areas had a high margin error.
This is enough accuracy to make any investor feel extremely confident
in using these predictions. One
more notable fact is that that over
70% of all missed predictions were under estimated in regards to
appreciation. That makes the forecast very
conservative. A
conservative prediction means that the extra appreciation gain would
be a gift to the investor who has based decisions on less
equity
gains.
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