Compare Historical Price of US New Home Prices in USD versus Gold oz.

With all the currency manipulation by the Fed and the market hysteria one wonders what is the measure of the value of houses.  I used publicly available sources of data to create a Comparison of the Historical Price of US Home Prices in USD versus ounces of Gold.

Links to Data Sources:
Median and Average Sales Prices of New Homes Sold in United States

HISTORICAL GOLD PRICES- 1833 to Present

Link to Data file and chart in MS Excel:
Excel Data file of Median Sales Prices (USD vs. Gold) of New Homes Sold in United States

An amazing view of the value of US New Home Prices evaluated in ounces of gold compared to USD shows how you would pay 646 ounces of gold for a new House in 2001 but less than 30% of that at 181 ounces of gold in 2010.  Whilst in 2001 you would pay $213K for a new house versus $273K in 2010.  It's a striking illustration of not only the housing bubble, the financial crisis, dollar devaluation and gold as a store of value. Clearly there are more questions and uncertainty on the outlook but one should remain optimistic that at least some commodities stand the test of time.

What are your thoughts on historical valuing other assets in ounces of gold? Feel free to use the above data file to do your own comparisons and indexing of the USD and the New house prices.

Yale Economist Robert J. Shiller created an Index of American housing prices based on standard existing houses, not new construction.  See graphic below and take note of the credits for the updates by Steve Barry.

TreeMaps to Monitor Application scorecards

When I started working with monitoring lending products application scorecards in 2003, I grappled with understanding and presenting the complex decision trees.  After some deliberation, paper and pencil I proposed a waterfall style diagram which evolved into different styles as we went along.

As an update or an improvement Tree Maps do seem an ideal step up from the old waterfall style diagrams mainly because they illustrate hierarchy, relative size and scorecard decisions may be color coded. 

Firstly here is a link again to where you can download the Add-in for MS Excel which is called Tree Map.  It is quite straightforward to install using the Help function if necessary.
   Link to Excel Add-in Tree Map
 Secondly here is a sample data file with dummy data from a lending product application scorecard monthly cycle. Sample Application Scorecard Data
I have presented both styles in this data file waterfall style and the TreeMapp style.  
 
Select the data in the Sample file to create a Tree Map as below.  You will notice how I have spent time on setting up the data such that the hiearchy is created from Scoring to Policy to Decision.  Color coding was based upon shades of Green for accept and shades of Red for decline.


Here if the JPEG format output of the TreeMap below.

Useful Tree Maps examples

Here is a link to an interactive Tree Map that I found impressive.

Smart Money Map of the Market

You will notice that it has a drop down box that may be used to change the reference period on share price changes.  Color and size of the rectangle gives a wonderful perspective of the market whilst there is the added dimension of changes over time with color.  Mouse over the rectangles and you get detail on the individual rectangles enabling exploration. A commentary on the side with references to the respective rectangles (stocks) make for an attention grabbing dashboard that entices the user to get involved.

Sharenet does a great HeatMap of the Johannesburg Stock Exchange.
Sharenet Heat Map of JSE (you need Java installed)


Another brilliant use of Tree Maps to illustrate market relative market positioning of Chrysler and othe car manufacturers:
New York Times Article on Chrysler's positioning in the car market 

Using Tree Maps for tracking Personal Consumption Expenditure

Tree Maps are an under-utilised form of data visualization.  I felt compelled to apply another publicly available data-set to a tree map.  So I found suitable the Table 2.3.5U. Personal Consumption Expenditures by Major Type of Product and by Major Function from the US Bureau of Economic Analysis Table 2.3.5U

Data was manipulated in Excel for the Tree Map Excel data file
Expenditure in Q1 2012 is used for the area of blocks which are classified under Services, Goods- Durable and Nondurable. Color of the blocks is derived from the percentage growth in expenditire from Q1 2011 to Q1 2012. Amazingly simple data visualization that you can talk to easily. The color coding gives a heat map of expenditure growth, while the area illustrates the dominant expenditure.

Tree Maps for Data Visualization

A few days ago I read a Peppers and Rogers report  that made intriguing use of a tree map. Tree Maps as a 2-dimensional representation, use rectangles with an area proportional to a specific dimension of the data, while colors can be used to represent another dimension of the data.  So I scratched around and found out more about tree maps and heat maps. I found that an add-in for Excel was available. It downloads quite easily from:  Link to Excel Add-in Tree Map
I am sure your will be able to install the add-in quite easily. Use the Excel Options by clicking on Office menu button from Excel.  Tree Map also made be used independently of Excel.

Finding topical data to test our the TreeMap add-in was easy, I used results of May poll on the Greek elections by the BBC News -Greek election poll

I converted the elections data into a suitable format for Excel Tree Map Add-in. Here is the file

Greek May 2012 Elections Poll Data

Output from the Tree Map add-in can be saved in a variety of formats. Here is my output saved as a JPEG format.

Using relatively simple data set, the visualization is much more exciting. As the data sets get larger and more complex, I expect the emerging patterns will be of more interest. I hope this saves you some time and you share my fascination with the Tree Maps.

And now the results a few days later:

A picture is worth a thousand words.  A colorful graphic depicts the swing in vote quite dramatically.

Greek Election Results - BBC News