Regional multi-family housing start forecast accuracy

This paper extends earlier research regarding the predictability of residential construction activity in regional markets. Because of their implications for overall business conditions, housing start forecasts traditionally represent one of the most important components of regional prediction efforts. Quarterly frequency data are assembled from previously published econometric forecasts for Florida and its six largest metropolitan economies. The sample simulation period covers 1985:1-1996:2 and includes all three business cycle phases: expansion, recession, and recovery. Multi-family housing start forecasts are compared to univariate time series and random walk alternatives. Results indicate that structural model forecasts of multi-family regional housing activity are comparatively less reliable than those for nonagricultural employment, but superior to those for single-family residential construction. (C) 2001 International Institute of Forecasters. Published by Elsevier Science B.V. All rights reserved.