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.

Given your results from the previous problem: a. What can you say about the magnitude and the volatility of housing price appreciation in the short, medium and long run? b. Are the results from question 5 consistent with the theory of price appreciation we discussed in the beginning of this course? Briefly explain.

1975 2 53.6 1975 54.6 1976 1 34.96 55.9 1976 2 3601 5844 56.8 1976 3 36.51 58.03 57.61 58.2 1976 38.03 58.01 10 1977 1 37.13 60.05 59.5 65.95 13 1977 4 42.05 67.65 62. 14 1978 1 39.61 69.61 63.4 42.97 74.96 17 1978 4 45.75 77.17 67.7 1979 1 48.71 78,81 19 1979 48.3 83.19 72.3 20 19 79 3 53.56 84.61 74.6 1979 4 56.95 85.34 76.7 58.63 88.06 1980 1980 3 53.22 90.75 84.0 25 1980 64.85 93.02 86.3 1 67.14 89.71 88.5 26 1981 27 90.6 1981 67.21 95.93 28 1981 3 55.15 97.5 93.2 29 1981 66.67 100.3 30 1982 69.58 106.19 94.5 1982 2 69.97 107.76 97.0 32 1982 3 67.7 105.55 97.9 33 69.89 1982 107.6 97.6 34 102.67 97.9 1983 69.07 135 1983 2 68.31 108.33 99.5 68.84 107.41 100.7 69.11 107.02 101.3 Time Period Q2 2007 Q4 2009 (2.5 years) Q1 2003 Q1 2006 (3 years) Q2 1986 -Q2 1995 (9 years) Q2 1978 -Q2 2016 (38 years) AR 47 AR in 411 Houston Nominal Annual Price Miami Real Annual Price Appreciation Houston Real Annual 1975 2 53.6 1975 54.6 1976 1 34.96 55.9 1976 2 3601 5844 56.8 1976 3 36.51 58.03 57.61 58.2 1976 38.03 58.01 10 1977 1 37.13 60.05 59.5 65.95 13 1977 4 42.05 67.65 62. 14 1978 1 39.61 69.61 63.4 42.97 74.96 17 1978 4 45.75 77.17 67.7 1979 1 48.71 78,81 19 1979 48.3 83.19 72.3 20 19 79 3 53.56 84.61 74.6 1979 4 56.95 85.34 76.7 58.63 88.06 1980 1980 3 53.22 90.75 84.0 25 1980 64.85 93.02 86.3 1 67.14 89.71 88.5 26 1981 27 90.6 1981 67.21 95.93 28 1981 3 55.15 97.5 93.2 29 1981 66.67 100.3 30 1982 69.58 106.19 94.5 1982 2 69.97 107.76 97.0 32 1982 3 67.7 105.55 97.9 33 69.89 1982 107.6 97.6 34 102.67 97.9 1983 69.07 135 1983 2 68.31 108.33 99.5 68.84 107.41 100.7 69.11 107.02 101.3 Time Period Q2 2007 Q4 2009 (2.5 years) Q1 2003 Q1 2006 (3 years) Q2 1986 -Q2 1995 (9 years) Q2 1978 -Q2 2016 (38 years) AR 47 AR in 411 Houston Nominal Annual Price Miami Real Annual Price Appreciation Houston Real Annual