What is the aterio score and how is useful to investors

Sergio Toro

Chief of Data at aterio.io

Using a scoring system to evaluate investment choices in real estate is immensely valuable as it provides a structured and data-driven approach to decision-making. Such a system allows investors to objectively compare different opportunities, mitigating emotional biases and enhancing overall analysis. The Aterio Score includes crucial factors like the migration of people to a neighborhood, the current inventory of houses and future need for new units, the potential for appreciation, rental demand, and local economic trends. Additionally, considering the capacity to pay of potential buyers or renters, regulatory stability, and market liquidity are vital for a comprehensive assessment. By incorporating these factors into a scoring system, investors gain a clearer understanding of each location's strengths and weaknesses, enabling them to make well-informed choices that align with their investment goals and risk tolerance.

Aterio assigns a numeric value from 1 to 100 to each factor based on statistical analysis and past behavior. The Aterio score is the mathematical result of the aggregation of all factors weighted by relevance from the following 6 indexes:

Prices Index

Quantifying changes in real estate prices is essential for informed decision-making. Aterio measures price fluctuations over time, the number of days in the market for assets, and other factors. This approach allows for accurate analysis, and trend identification of market movements.

Population and Migration Index

Quantifying migration is crucial for understanding its impact on real estate prices. By assigning a mathematical score, we can measure the degree of migration influence. This approach enables accurate predictions, informs investment decisions, and aids in identifying emerging real estate trends.

Demand Vs Supply Index

Quantifying demand versus supply in a region is crucial for comprehending its impact on real estate prices. By utilizing a mathematical score, we can effectively measure the balance between the number of available properties (supply) and the level of interest from buyers or renters (demand). This data-driven approach enables investors and stakeholders to gauge market dynamics accurately. Understanding the interplay between demand and supply helps identify potential price fluctuations, predict emerging trends, and make strategic investment decisions.

Economic Development Index

Quantifying changes in regional economic development is vital for understanding their impact on real estate prices. Aterio measures the degree of economic growth in a neighborhood based on new developments, and job openings. Aterio also measures the closure of establishments and layoffs of workers that have a negative impact on economic development. This approach enables informed decision-making and assists in identifying investment opportunities.

Capacity to Pay Index

Quantifying changes in the capacity to pay of people in a region is crucial for understanding their impact on real estate prices. By employing a mathematical score, we can effectively measure the affordability and purchasing power of potential buyers and renters. This approach enables accurate analysis of market demand, helps identify pricing trends, and informs strategic investment decisions.

Risk Index

Quantifying risks in the real estate market is essential for informed decision-making. By utilizing a mathematical score, we can effectively measure and assess various risk factors such as market volatility, economic conditions, and regulatory changes. This approach allows for better risk management, identification of potential pitfalls, and informed investment strategies. The accuracy of the aterio score will typically vary over time. Aterio does not guarantee that the accuracy levels, trends, or correlations will recur for any market in the future. Aterio’s Scores are for information purposes only, nothing in aterio’s data products should constitute or be construed as investment advice or recommendations by aterio on investment strategy or on whether or not to “buy”, “sell” or hold an investment.