DAT565 Phoenix Houses Sold Median and Average Sale Price Analysis

DAT565

University of Phoenix

### Question Description

I have already created the first part (Excel document) and attached it.

# Trending Analysis

Resources:

Create an Excel® document in which you include the following:

• Paste from "Median and Average Sale Price of Houses Sold", Price Ann sheet, the Period and Median Price columns (column A and B respectively), starting from year 1963.
• On a third column, calculate Index, taking into assumption that for year 1984 it is 100. Format it to 1 decimal place. Name it "House Price Index."
• For example, for year 1983, the index will be calculated based on median price of 1983 vs. 1984 (e.g. 94.2).
• As a second example, for year 1985, the index will be calculated based on median price of 1985 vs. 1986 (e.g. 105.5).
• On a fourth column, paste from "Annual U.S. CPI (includes CPI-U and CPI-W)", the Index column (column B) starting from 1963. Name it "Consumer Price Index."
• Create a line chart, plotting "House Price Index" and "Consumer Price Index" for each year, starting from 1963. Year will be the X Axis. Price Index will be the Y Axis.
• Save the Excel® document for submission.

Compose a minimum 1,050-word report in which you address the following:

• Analyze the correlation between "House Price Index" and "Consumer Price Index."
• Evaluate conditions of abrupt median price change and correlate to a historical event (e.g. 2006).
• Predict the trend for "House Price Index" for the next few years.
• Synthesize your predictions in regards to the current market conditions based on the "House Price Index" vs. "Consumer Price Index."
• Analyze the median income increase in the last 10 to 20 years. Correlate with the graph you have created and assess your findings.

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Report
Institutional Affiliation
Date

REPORT

2

REPORT
Levels of inflation, research, and technology, ownership of capital equipment, availability of
products to satisfy human wants among others are some of the factors that influence the levels of
standards of living in a particular country. Cost of living is the key determinant to standards of
living; the price index explains the relationship between various price changes between products.
The price index is arranged in arrays to enable comparison between prices over a specific period
of time. An index can be a measure of the general price level in an economy. This helps
producers and other stakeholders to make pricing plans to guide wise investment.
Among other price indexes used by economists and policymakers include housing price index,
producers’ price index and the consumer price index. CPI makes use of a sample of products
prices collected periodically to reflect a general weight in the overall share of consumer
expenditure. The annual change of CPI is the measure of inflation. Regulating factors of
consumer price index include wages, salaries and pensions show changes in values. When
formulating indexes data, planning throughout the process ensures that the index reflects only the
changes in price and price only. Housing price index measures price changes in residential
commercial housing and ...

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