Real Estate Analysis with Excel

Staple pages. Write your name on the front of the first page AND the back of the last page that you hand in [1pt]. 1. [12pts] Google the St Louis Economics Database (“Fred II”) and download the monthly constant maturity 1-year and 10-year series (excel-format, denoted GS1 and GS10, respectively). Similarly, google the Bureau of Labor Statistics (“BLS”) and create a spreadsheet of the all-urban CPI (“inflation”) index. a. Compute a column that shows the YoY inflation rate, as a monthly series. b. Plot the monthly 1-yr CMT, 10-yr CMT, and inflation rate on a single graph, from (at least) the 1960’s through the present. Make sure that the x-axis matches the available data range. c. Comment on the peak in the early 80’s and on the state of affairs from the late 90’s through the present. 2. [12pts] Recreate the real Case-Shiller index for the Los Angeles by similarly obtaining the necessary data from a web-search (Standard and Poor’s). Note that the index you download will be a nominal index. Show both the nominal and real indexes on one plot, using the earliest available Case-Shiller date as the base period. 3. [11pts] Download the (not seasonally adjusted) monthly shelter component of CPI for LA/Orange/Riverside (or LA-Long Beach Anaheim). Plot the ratio of nominal price (from question 2) to cost of shelter index. Normalize the ratio to be 59.33 on Jan 1, 1987. What does this ratio tell you about rent inflation when compared to the real LXXR? 4. [4pts] How far are we currently from the 2006 peak (in percent), in nominal and real terms? Do you think we are back in a bubble? So so/not, why/not?