Retroactive Backtesting: Historical Performance
Comparing the model's data-driven valuations against nine years of Habistat cottage market data.
Testing the Theory
The live Ontario Cottage Market Forecaster™ runs on a 90/10 split: 90% hard macroeconomic and inventory data, and 10% "boots on the ground" human sentiment that captures the market urgency numbers alone cannot.
This page sets the data-driven side of that model against what actually happened. The solid blue line is the actual median price each year, drawn from Habistat. The dashed orange line is the model's data-driven valuation, calculated from each year's real interest rate, equity, inventory, and days-on-market inputs, before the human sentiment layer is added. The gap between the two is the part the data alone does not explain, the slice the live tool fills with its sentiment read. Move through the timeline and you can watch the model's read turn with the major moments of the last decade: the 2021 surge, the 2022 peak, and the correction we are in now.
Macro Economic Signals
Segment Performance
Complete Data Architecture & Methodology
The forecaster pulls together inputs across a few categories to build a forward-looking valuation. Here is what the engine tracks:
- The Bank of Canada target rate (the gravity): In a discretionary market, borrowing costs act like gravity. We track the overnight rate to gauge the baseline carrying cost of a recreational property. When rates rise, purchasing power falls quickly.
- TSX, S&P 500, and the VIX (the wealth effect): High-net-worth buyers often fund cottage purchases from equities and portfolios. We track the S&P/TSX Composite and the S&P 500 to gauge the capital available, and the CBOE Volatility Index (VIX) to gauge the confidence to spend it. A strong stock market means little if the VIX is spiking, because buyers shift toward preserving capital rather than buying luxury real estate.
- Months of Inventory, MOI (the friction): Sourced from regional board data, MOI sets negotiation leverage. It measures how long it would take to sell every active listing at the current pace of sales. We use different thresholds for entry-level versus prime and luxury tiers, since premium assets normally carry higher baseline inventory.
- Median Days on Market, DOM (the velocity): This measures the speed of the market. Fast absorption signals buyer urgency, while rising days on market is an early warning of buyer fatigue before prices start to move.
- The 10% human sentiment modifier (live forecaster only): The chart above uses only the data signals. The live forecaster adds a human modifier to capture real-time shifts the data cannot see, such as a sudden change in remote-work policy or a burst of local buyer urgency.
A note on the tiers: where the board data is not broken out by price tier, the entry and luxury lines are modeled from each region's series to show how a tier typically behaves, rather than drawn from separate tier-level sales.