Market Kinetics

MDOT Analytics : Timing Your Market

Market Kinetics

MDOT Analytics : Timing Your Market

Advantage Report: A Market timing tool

MDOT (Market Direction of Travel) – A Smarter Way to Track Real Estate Markets

What is MDOT?

The Market Direction of Travel (MDOT) Scoring System is a data-driven approach to tracking and ranking real estate sub-markets based on their momentum. Unlike traditional market reports that focus on static numbers, MDOT identifies market trends over time helping INVESTORS, BUILDERS, REAL ESTATE BROKERS, and PROFESSIONAL UNDERWRITERS protect their assets .

MDOT tracks the three key market fundamentals:

Price (P): Median Sale Price – Is it rising or falling?
Supply (S): Months of Inventory – Is housing supply increasing or shrinking?
Demand (D): Number of Homes Sold – Are more or fewer homes selling?

By measuring whether these indicators increase or decrease compared to the same month last year, MDOT creates a performance score for each sub-market—allowing users to track trends, rank markets, and identify opportunities. Traditional market reports give you numbers—median prices, inventory levels, sales counts—but they don't tell you where the market is going. You need to see the bigger picture. You need a way to measure momentum, to understand whether a market is heating up, cooling down, or staying steady.

How it Works

The Market Direction of Travel (MDOT) Scoring System tracks real estate market momentum by measuring how often Price, Supply, and Demand have increased over the past 12 months, using a year-over-year comparison.

Let’s say you’re analyzing a specific sub-market. Here’s what MDOT looks at:

Price: Over the last 12 months, home prices have increased 6 times compared to the same months a year before. That gives Price a score of 6.
Supply: Inventory has increased every single month—12 out of 12 times. That gives Supply a score of 12.
Demand: The number of homes sold has only increased 2 times in the last 12 months. That gives Demand a score of 2.

The result? MDOT Score: 6-12-2 (Price-Supply-Demand).

Each score also represents the probability that the trend will continue next month.

A Price score of 6 means there’s a 50% probability prices will rise next month.
A Supply score of 12 means inventory has increased every month, making it almost certain to keep growing.
A Demand score of 2 means demand is weak and only has a 20% chance of increasing next month.

With this data, you now see more than just numbers—you see market momentum.

Advantage Report: Ranking the submarkets

MDOT SCORES: Ranking the Submarkets

MDOT scores rank and compare sub-markets by sorting their Price, Demand, and Supply scores in a specific order. This ranking system helps identify which markets are gaining momentum and which may be weakening, allowing investors, agents, and lenders to make data-driven decisions.

Each sub-market receives an MDOT score in the format Price-Demand-Supply (e.g., 8-10-4). The ranking process follows these steps:

Sort by Price Score (Descending Order) – Markets with a higher Price score rank higher, as more frequent price increases signal stronger appreciation trends.
Sort by Demand Score (Descending Order) – Among markets with the same Price score, those with a higher Demand score rank higher, as increasing buyer activity supports price stability and growth.
Sort by Supply Score (Ascending Order) – If two markets have identical Price and Demand scores, the one with the lower Supply score ranks higher, as a more limited inventory environment is more likely to sustain price growth.

Example of Market Comparison

Consider five sub-markets with the following MDOT scores:

Market A: 10-7-5
Market B: 10-5-4
Market C: 9-8-6
Market D: 9-8-5
Market E: 9-6-3

Step 1: Sort by Price Score (Descending Order)

Markets A and B have the highest Price score (10), so they rank first. Markets C, D, and E follow, all with a Price score of 9.

Step 2: Sort by Demand Score (Descending Order)

Between Market A (10-7-5) and Market B (10-5-4), Market A ranks higher because its Demand score (7) is greater than Market B’s (5).

Among the markets with a Price score of 9, Market C (9-8-6) and Market D (9-8-5) rank ahead of Market E (9-6-3) because their Demand scores (8) are higher than Market E’s (6).

Step 3: Sort by Supply Score (Ascending Order)

Market C and Market D both have Price = 9 and Demand = 8, so Supply determines their ranking. Since Market D has a lower Supply score (5) than Market C (6), Market D ranks higher.

Final Market Ranking

Market A – 10-7-5
Market B – 10-5-4
Market D – 9-8-5
Market C – 9-8-6
Market E – 9-6-3

How This Ranking System Helps Decision-Makers

Markets with higher Price and Demand scores rank higher, indicating strong appreciation potential and buyer activity.
Markets with lower Supply scores rank higher when other factors are equal, as limited inventory tends to support price increases.
By tracking how rankings change month to month, investors and real estate professionals can spot emerging trends, identify undervalued or overvalued areas, and adjust their strategies accordingly.

This structured approach ensures objective, data-driven market comparisons, making it easier to navigate real estate investments with confidence.

Advantage Report: Tracking Mdot scores over time

Our Mission

Tracking MDOT Scores Over Time to Estimate Future Market Trends

MDOT scores provide a structured way to analyze Price, Supply, and Demand movements across sub-markets over time. By tracking how each sub-market's scores change from month to month, investors, agents, and lenders can estimate the probability of future market conditions and anticipate shifts in real estate performance.

Each MDOT score represents how often a variable (Price, Supply, Demand) has increased year-over-year over the past 12 months. For example, a Price score of 8 means that Price increased 8 out of the last 12 months when compared to the same month in the prior year. The same logic applies to Supply and Demand.

Tracking Individual Market Variables Over Time

Price Trends:
- If a sub-market consistently shows a high Price score (e.g., 9 or 10) over multiple months, it suggests a strong price appreciation trend.
- If the Price score starts declining, this may indicate weakening price growth, signaling a potential slowdown.
- A stable or fluctuating Price score around 6 suggests price movements have been balanced.

Supply Trends:
- A rising Supply score (moving from 4 to 8 over several months) suggests increasing inventory, which may lead to softer pricing.
- A declining Supply score signals tightening inventory, which can put upward pressure on prices if demand remains steady.
- If Supply remains at 12 for multiple months, it means inventory has increased every single month, potentially signaling a cooling market.

Demand Trends:
- A high and stable Demand score (e.g., 9 or 10) over time suggests strong buyer activity, supporting price appreciation.
- A declining Demand score (e.g., dropping from 7 to 3 over several months) indicates weakening buyer interest, which could lead to longer listing times and downward pressure on prices.

Estimating Future MDOT Scores Using Probability

Since MDOT tracks how often a variable has increased year-over-year over the past 12 months, it can be used to estimate the probability of that variable increasing in the following month.

For example, if a sub-market’s Price score is 8, then Price has increased in 8 of the past 12 months, giving it an estimated 67% probability (8/12) of increasing next month. The same probability model applies to Supply and Demand.

If Price = 10, there is an 83% probability (10/12) that Price will increase next month.
If Supply = 12, inventory has increased every month for the past year, suggesting a high likelihood of continued supply growth.
If Demand = 3, there is only a 25% probability (3/12) that Demand will increase next month, signaling possible market softening.

Using MDOT Trends to Make Market Predictions

By tracking MDOT scores over time, patterns emerge that help decision-makers estimate future market conditions:

✅ Markets with rising Price and Demand scores and declining Supply scores are strengthening.
✅ Markets with falling Price and Demand scores and rising Supply scores are weakening.
✅ Markets with stable scores indicate a balanced environment with steady conditions.

By continuously monitoring these trends, investors, real estate professionals, and lenders can make informed decisions about where to allocate capital, when to buy or sell, and how to adjust strategies based on market momentum.

Market Kinetics

Market Kinetics

Advantage Report: A Market timing tool

MDOT (Market Direction of Travel) – A Smarter Way to Track Real Estate Markets