A. Calculate the nominal and real annual rate of housing price appreciation rate for Miami and for Houston for the requested different time periods using the housing price index data and the inflation index data provided to you in tab A5 of the Excel spreadsheet. In total, you need to calculate 16 values that will appear in the 16 yellow cells of that Excel tab

B. What can you say about the magnitude and the volatility of housing price appreciation in the short, medium and long run?

C. Are the results from question 5 consistent with the theory of price appreciation we discussed in the beginning of this course? Briefly explain.

Number Leurs Cailing Q2 1978 - Q2 2018 (40 years) G . I J K L Time Period Miami Nominal Annual Price Appreciation Rate Houston Nominal Annual Price Appreciation Rate Miami Real Annual Houston Real Annual Price Appreciation Price Appreciation Rate Rate Q2 2007 - Q4 2009 (2.5 years) Q1 2002 - Q1 2006 (4 years) Q2 1986 - Q2 1995 (9 years) Q2 1978 - Q2 2018 (40 years) D E F 1 Miami Houston Inflation 2 52.7 3 53.6 4 54.6 5 55.5 6 34.85 51.59 55.9 7 36.04 58.32 56.8 8 36.44 58 57.6 9 37.99 57.8 58.2 10 37.12 59.94 59.5 11 39.2 65.9 60.7 12 40.28 64.23 61.4 13 41.91 67.66 62.1 14 39.72 69.45 63.4 15 43.05 74.66 65.2 16 42.34 73.44 66.5 17 45.72 76.89 67.7 18 48.42 78.71 69.8 19 48.39 83.32 72.3 20 53.62 84.67 74.6 21 56.79 85.55 76.7 2007 30 1 506 | 11 | A2 A3 A4 A5 A6 A7 A8 | 49 | A10 A11 A12 + O 10:35 PM gnment Numbe Leurs Carling E G H 1 K L 21 22 23 24 25 26 27 28 29 BO 31 32 33 34 35 36 37 38 39 40 41 12 D 56.79 58.6 57.43 63.32 64.88 67.13 66.99 55.28 66.65 69.89 70.22 67.47 70.26 68.96 68.45 68.88 69.11 67.73 69.56 67.03 68.46 68.91 85.55 88.07 91.92 90.89 92.8 89.81 96.01 97.58 100.37 106.2 107.95 105.65 107.81 107.81 108.4 107.62 106.86 103.45 103.37 103.95 101.38 97.99 F 76.7 80.1 82.7 84.0 86.3 88.5 90.6 93.2 94.0 94.5 97.0 97.9 97.6 97.9 99.5 100.7 101.3 102.6 103.7 105.0 105.3 106.4 A1 | 12 | 13 | 14 A5 A6 A7 A8 49 | 10 A11 A12 ... + 1 ont Alignment Number Styles Cells Editing G H K L 42 43 44 45 46 47 48 49 50 51 52 53 54 D E 68.91 97.99 67.76 95.83 66.98 94.32 66.99 92.13 68.6 93.16 70.2 94.4 71.17 92.61 71.01 88.22 68.3 88.1 72.51 86.56 73.64 83.78 74.43 81.55 74.52 81.87 76.5 84.32 77.69 85.05 79.09 85.59 79.33 86.37 80.13 88.45 81.66 90.37 81.51 90.89 83.21 91.48 82.82 92.53 A1 F 106.4 107.6 108.3 109.3 108.8 109.5 110.2 110.5 112.1 113.5 115.0 115.4 116.5 118.0 119.8 120.5 122.3 124.1 125.0 126.1 128.7 129.9 55 56 57 58 59 60 61 62 63 A2 A3 A4 A5 A6 A7 A8 A9 410 A11 A12 | + - Tuesday, Octob Font Alignment Number Styles Cells Editing G H J K L 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 D 83.65 83.36 84.58 84.73 85.38 86.96 87.99 87.73 89.04 89.15 90.45 92.76 95.61 96.95 97.65 98.55 98.84 98.97 100 101.5 103.64 E 93.74 93.56 94.46 95.65 96.21 97.19 98.89 98.42 100.18 100.07 100.38 100.87 101.68 102.25 102.25 101.71 101.67 100.26 100 101.67 102.16 102.74 F 132.7 133.8 135.0 136.0 137.2 137.9 139.3 140.2 141.3 141.9 143.6 144.4 145.1 145.8 147.2 148.0 149.4 149.7 151.4 152.5 153.2 153.5 80 81 82 83 84 85 105.29 | A1 A2 A3 A4 A5 A6 A7 A8 A9 A10 A11 A12 | Font Alignment Number [5 Styles Cells Editing D F G H j K 1 86 87 88 89 90 91 92 93 94 95 96 106.61 106.01 105.67 107.19 108.04 107.68 108.08 110.14 113.35 113.35 113.73 115.91 116.32 115.6 116.9 118.65 121.32 123.09 125.16 128.15 132.2 136.56 E 104.24 103.74 103.99 104.63 104.47 106.25 107.3 108.45 110.87 111.99 114.31 115.72 117.28 120.24 123.21 125.78 127.26 129.24 130.99 132.03 136.29 137.76 A1 A2 155.7 156.7 157.8 158.6 160.0 160.3 161.2 161.3 162.2 163.0 163.6 163.9 165.0 166.2 167.9 168.3 171.2 172.4 173.7 174.0 176.2 178.0 97 98 99 100 101 102 103 104 105 106 107 A3 A4 A5 A6 A7 A8 A9 A10 A11 A12 ... + Alignment Number Styles Cells Editing F G H 1 K 178.3 176.7 178.8 179.9 181.0 180.9 184.2 183.7 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 D 140.36 144.98 149.12 154.71 161.09 166.01 170.76 176.21 180.8 190.87 197.66 206.91 220.75 230.2 242.23 258.75 276.27 294.66 309.5 321.9 331.11 E 139.61 140.99 141.7 143.45 145.22 147.36 148.43 149.34 150.23 151.72 153.28 154.66 156.69 157.68 160.22 161.23 163.58 166.15 168.72 171.22 173.67 175.05 A1 A2 185.2 184.3 187.4 189.7 189.9 190.3 193.3 194.5 198.8 196.8 199.8 202.9 202.9 201.8 A3 A4 337.48 A5 A6 A7 A8 A9 210 211 212 | 1 Font Alignment Number Styles Cells Editing G H 1 J K L 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 D 342.38 343.25 337.97 331.22 315.56 291.89 256.05 236.14 226.16 213.32 199.05 200.55 195.61 193.88 196.88 194.03 184.56 180.05 181.61 184.29 180.57 181.79 E F 177.33 205.352 180.2 208.352 180.99 208.490 182.13 210.036 184.22 213.528 184.8 218.815 185.97 218.783 185.6 210.228 188.27 212.709 186.76 215.693 185.45 215.969 185.04 215.949 183.8 217.631 184.21 217.965 184.76 218.439 184.45 219.179 181.18 223.467 180.76 225.722 182.19 226.889 182.73 225.672 183.84 229.392 186.3 229.478 A1 A2 A3 A4 A5 A6 A7 A8 A9 A10 A11 A12 + Font Alignment Number Styles Cells Editing D E F G H K L 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 196 205.2 210.22 217.64 222.3 228.56 236.95 242.48 244.42 251.76 260.12 265.12 272.37 277.33 283.61 289 295.67 302.09 306 313.69 319.81 327.43 191.83 232.773 195.45 233.504 200.46 234.149 205.1 233.049 209.17 236.293 217 238.343 224.51 238.031 227.68 234.812 230.27 236.119 237.35 238.638 240.63 237.945 241.86 236.525 242.67 239.261 247.59 241.038 250.61 241.428 253.22 241.432 254.5 243.524 262.22 244.737 262.74 245.708 267.44 246.524 269.76 249.554 277.07 251.989 A1 A2 A3 A4 174 175 A5 A6 A7 A8 A9 A10 A11 A12 - + Number Leurs Cailing Q2 1978 - Q2 2018 (40 years) G . I J K L Time Period Miami Nominal Annual Price Appreciation Rate Houston Nominal Annual Price Appreciation Rate Miami Real Annual Houston Real Annual Price Appreciation Price Appreciation Rate Rate Q2 2007 - Q4 2009 (2.5 years) Q1 2002 - Q1 2006 (4 years) Q2 1986 - Q2 1995 (9 years) Q2 1978 - Q2 2018 (40 years) D E F 1 Miami Houston Inflation 2 52.7 3 53.6 4 54.6 5 55.5 6 34.85 51.59 55.9 7 36.04 58.32 56.8 8 36.44 58 57.6 9 37.99 57.8 58.2 10 37.12 59.94 59.5 11 39.2 65.9 60.7 12 40.28 64.23 61.4 13 41.91 67.66 62.1 14 39.72 69.45 63.4 15 43.05 74.66 65.2 16 42.34 73.44 66.5 17 45.72 76.89 67.7 18 48.42 78.71 69.8 19 48.39 83.32 72.3 20 53.62 84.67 74.6 21 56.79 85.55 76.7 2007 30 1 506 | 11 | A2 A3 A4 A5 A6 A7 A8 | 49 | A10 A11 A12 + O 10:35 PM gnment Numbe Leurs Carling E G H 1 K L 21 22 23 24 25 26 27 28 29 BO 31 32 33 34 35 36 37 38 39 40 41 12 D 56.79 58.6 57.43 63.32 64.88 67.13 66.99 55.28 66.65 69.89 70.22 67.47 70.26 68.96 68.45 68.88 69.11 67.73 69.56 67.03 68.46 68.91 85.55 88.07 91.92 90.89 92.8 89.81 96.01 97.58 100.37 106.2 107.95 105.65 107.81 107.81 108.4 107.62 106.86 103.45 103.37 103.95 101.38 97.99 F 76.7 80.1 82.7 84.0 86.3 88.5 90.6 93.2 94.0 94.5 97.0 97.9 97.6 97.9 99.5 100.7 101.3 102.6 103.7 105.0 105.3 106.4 A1 | 12 | 13 | 14 A5 A6 A7 A8 49 | 10 A11 A12 ... + 1 ont Alignment Number Styles Cells Editing G H K L 42 43 44 45 46 47 48 49 50 51 52 53 54 D E 68.91 97.99 67.76 95.83 66.98 94.32 66.99 92.13 68.6 93.16 70.2 94.4 71.17 92.61 71.01 88.22 68.3 88.1 72.51 86.56 73.64 83.78 74.43 81.55 74.52 81.87 76.5 84.32 77.69 85.05 79.09 85.59 79.33 86.37 80.13 88.45 81.66 90.37 81.51 90.89 83.21 91.48 82.82 92.53 A1 F 106.4 107.6 108.3 109.3 108.8 109.5 110.2 110.5 112.1 113.5 115.0 115.4 116.5 118.0 119.8 120.5 122.3 124.1 125.0 126.1 128.7 129.9 55 56 57 58 59 60 61 62 63 A2 A3 A4 A5 A6 A7 A8 A9 410 A11 A12 | + - Tuesday, Octob Font Alignment Number Styles Cells Editing G H J K L 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 D 83.65 83.36 84.58 84.73 85.38 86.96 87.99 87.73 89.04 89.15 90.45 92.76 95.61 96.95 97.65 98.55 98.84 98.97 100 101.5 103.64 E 93.74 93.56 94.46 95.65 96.21 97.19 98.89 98.42 100.18 100.07 100.38 100.87 101.68 102.25 102.25 101.71 101.67 100.26 100 101.67 102.16 102.74 F 132.7 133.8 135.0 136.0 137.2 137.9 139.3 140.2 141.3 141.9 143.6 144.4 145.1 145.8 147.2 148.0 149.4 149.7 151.4 152.5 153.2 153.5 80 81 82 83 84 85 105.29 | A1 A2 A3 A4 A5 A6 A7 A8 A9 A10 A11 A12 | Font Alignment Number [5 Styles Cells Editing D F G H j K 1 86 87 88 89 90 91 92 93 94 95 96 106.61 106.01 105.67 107.19 108.04 107.68 108.08 110.14 113.35 113.35 113.73 115.91 116.32 115.6 116.9 118.65 121.32 123.09 125.16 128.15 132.2 136.56 E 104.24 103.74 103.99 104.63 104.47 106.25 107.3 108.45 110.87 111.99 114.31 115.72 117.28 120.24 123.21 125.78 127.26 129.24 130.99 132.03 136.29 137.76 A1 A2 155.7 156.7 157.8 158.6 160.0 160.3 161.2 161.3 162.2 163.0 163.6 163.9 165.0 166.2 167.9 168.3 171.2 172.4 173.7 174.0 176.2 178.0 97 98 99 100 101 102 103 104 105 106 107 A3 A4 A5 A6 A7 A8 A9 A10 A11 A12 ... + Alignment Number Styles Cells Editing F G H 1 K 178.3 176.7 178.8 179.9 181.0 180.9 184.2 183.7 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 D 140.36 144.98 149.12 154.71 161.09 166.01 170.76 176.21 180.8 190.87 197.66 206.91 220.75 230.2 242.23 258.75 276.27 294.66 309.5 321.9 331.11 E 139.61 140.99 141.7 143.45 145.22 147.36 148.43 149.34 150.23 151.72 153.28 154.66 156.69 157.68 160.22 161.23 163.58 166.15 168.72 171.22 173.67 175.05 A1 A2 185.2 184.3 187.4 189.7 189.9 190.3 193.3 194.5 198.8 196.8 199.8 202.9 202.9 201.8 A3 A4 337.48 A5 A6 A7 A8 A9 210 211 212 | 1 Font Alignment Number Styles Cells Editing G H 1 J K L 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 D 342.38 343.25 337.97 331.22 315.56 291.89 256.05 236.14 226.16 213.32 199.05 200.55 195.61 193.88 196.88 194.03 184.56 180.05 181.61 184.29 180.57 181.79 E F 177.33 205.352 180.2 208.352 180.99 208.490 182.13 210.036 184.22 213.528 184.8 218.815 185.97 218.783 185.6 210.228 188.27 212.709 186.76 215.693 185.45 215.969 185.04 215.949 183.8 217.631 184.21 217.965 184.76 218.439 184.45 219.179 181.18 223.467 180.76 225.722 182.19 226.889 182.73 225.672 183.84 229.392 186.3 229.478 A1 A2 A3 A4 A5 A6 A7 A8 A9 A10 A11 A12 + Font Alignment Number Styles Cells Editing D E F G H K L 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 196 205.2 210.22 217.64 222.3 228.56 236.95 242.48 244.42 251.76 260.12 265.12 272.37 277.33 283.61 289 295.67 302.09 306 313.69 319.81 327.43 191.83 232.773 195.45 233.504 200.46 234.149 205.1 233.049 209.17 236.293 217 238.343 224.51 238.031 227.68 234.812 230.27 236.119 237.35 238.638 240.63 237.945 241.86 236.525 242.67 239.261 247.59 241.038 250.61 241.428 253.22 241.432 254.5 243.524 262.22 244.737 262.74 245.708 267.44 246.524 269.76 249.554 277.07 251.989 A1 A2 A3 A4 174 175 A5 A6 A7 A8 A9 A10 A11 A12 - 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