The past few days (the 2nd and the 5th) we’ve posted a couple of comments about why we’re revising our Market Fundamental Scoring algorithms a bit early this year, and talked a bit about what we’ve been changing. 

One of the most exciting changes we’ve made will be of particular interest to multifamily investors.  We feel, as do many in the industry, that current single family housing conditions as well as the very constrained credit markets have had a dramatic impact on multifamily occupancies over the past 15 to 18 months. 

In some markets where the single family conditions are particularly bad, some have argued that we have been over-weighting the impact of single family conditions in our multifamily market analysis. 

For our multifamily tools / algorithms, we have spent a great deal of time over the past few months modeling and testing various very slight modifications in the system which in essence have slightly de-emphasized the impact of single family issues and emphasized the “nuts and bolts” metrics of the multifamily ops in the market.  We were very pleased with the results and feel that these changes have allowed us to hone in much more specifically on emerging / recovering markets.  It will change our Market Fundamental Rankings quite a bit for the September newsletter, and for those who have subscribed to the Real Estate Market Reference, we are going to work this week to publish an extra issue reflecting these changes. 

We have made similar changes to our single family algorithms, and again feel as we tested the changes the results were impressive.  We have emphasized the impact of single family market dynamics and lessened the impact of the multifamily metrics (used in our single family rankings to reflect the state of the rental / lease market among other things).  Our Market Fundamental Rankings for single family have shuffled a bit, as will be reflected in the September newsletter, and it appears to have made the stronger markets score even higher in the ranking tool, and the marginal markets lower.

Finally, we have all of the cities we are currently tracking converted over to the new scoring system;  the team finished about 730 last night after a very busy week of concentrated effort.  

We have a very interesting new algorithm and ranking array we’ll be rolling out either late this next week or early the week after, and will have more to say about it in the next few days. 

As we’ve said before, we’re most excited by the improvements we’re making in our algorithms and scoring systems, and looking forward to helping good investors make better decisions in this rapidly changing real estate climate. 

Have a good weekend; most of us here in the Bozeman office headed off to fish in Yellowstone again this afternoon.  Do something fun with your loved ones this weekend. 

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