ECO 6214 : Module 4, Discussion: House Sales Forecast with Bivariate Regression ...

Introduction

This discussion allows you to discuss and apply the linear trend model for forecasting total house sales in the United States.

Instructions

Download the data on annual historical total houses sold (THS) in the U.S. and its regions. Select a region you are interested in and get the last 20 years of data.

To prepare for the discussion, undertake the analysis on the given points:

• By using a bivariate regression trend line model, forecast total houses sold for the next five years.
• Prepare a time series plot of these data (years are on the x axis, THS is on the y axis) that shows both actual and forecast THS for the next five years.

Post the results of your statistical analysis and the graph with your response to the following:

• Do you think the model looks as though it will provide reasonably accurate forecasts for a five-year horizon? Explain your answer.

HINTS:

• The data set in the discussion includes multiple spreadsheets. You will need to use the data on the first spreadsheet (Sol Ann). Choose a region from this spreadsheet and extract 20 years of house sales data (1996-2016). Next, use a linear trend model to forecast the next five years.
• I have also created a video demonstrating the use of a linear trend model with Texas population data. Please watch the video, and if you have any questions, please let me know.

Linear Trend Model with Texas Population Data.

• Refer to the given video if you do not know how to estimate data with a trend line in Excel.

Corman, L. (2010, September 28). Trend lines and regression analysis in excel. [Video file] [14 min 43 sec]. Retrieved from https://www.youtube.com/watch?v=6rOlGbLeQxI

Directions

• Make your initial post by Day 4 of this week and comment on at least two of your classmates' posts by Day 7.
• Post your response to the discussion and then read your classmates’ posts. Post TWO responses to at least TWO of your classmates' posts. Initial post should be no less than 150 words and no more than 450 words.
• Discussions need to be professional. Please make proper use of capitalization and punctuation and make sure that there are no misspellings, incomplete sentences, or other grammatical errors.
• The basic criterion for a discussion post to be considered effective is that your message is original and intelligible. You must communicate concisely and clearly.

Expert Answer