Technical Specification

Engine v2.10, data as of 2026 Q2. Every formula, constant and rule behind the published readings, as implemented.

1. Scope and conventions

The unit of analysis is the metro-quarter: 58 U.S. multifamily metros, quarterly. Each market is scored against its own history only; no cross-market pooling enters any standardization.

All terms are expressed in points toward defense. A positive term pushes the Cycle Score toward 100 (defend); a negative term pushes it toward 0 (lean in).

Subscript t denotes the quarter; t−1 the prior quarter; t−4 the same quarter a year earlier.

2. Inputs

Series	Definition
Vacancy	Vacancy rate, v
Rent Growth	12-month effective rent growth, g
Supply	Units under construction ÷ existing stock, s
Price Growth	12-month growth in closed-sale price per unit
Transaction Volume	(Deals this quarter − deals in the same quarter last year) ÷ last year's average quarterly deals; clipped to [−1, 2]
Price ÷ Replacement	Top-grade (4- and 5-star) price per unit ÷ national construction-cost index
HY spread	High-yield option-adjusted spread (national)
SLOOS	Net share of banks tightening standards for CRE / multifamily loans (national)

3. Operators

Standardization

Z_t(x) = (x_t − μ_t) ÷ σ_t

(3.1)

μ_t and σ_t are the mean and (population) standard deviation of the market’s own observations strictly before t, excluding 2020 Q2 – 2021 Q4. Z is undefined until at least 16 such observations exist. No observation at or after t enters its own standardization.

Z^±2(x) = min(2, max(−2, Z(x)))

(3.2)

Percentile

p_t(x) = share of prior observations (same exclusions, n ≥ 16) strictly below x_t

(3.3)

Change and blending

Δx_t = x_t − x_t−4 · Δ²x_t = Δx_t − Δx_t−4

(3.4)

F̃_t = 0.6·F_t + 0.4·F_t−1

(3.5)

4. Fundamentals (F)

Standing and Momentum

F_S = ½·Z(g) − ½·Vacancy Gap

(4.1)

Vacancy Gap_t = (v_t − μ_t(v)) ÷ σ_t(v)

(4.2)

F_Δ = ½·Z(Δg) − ½·Z(Δv)

(4.3)

Standing and Momentum are not capped. Both are blended by (3.5) to give F̃_S and F̃_Δ.

Strength and Position

R_F = √(F̃_S² + F̃_Δ²)

(4.4)

Position = 25·(F̃_S − F̃_Δ) ÷ max(R_F, 1.5)

(4.5)

For R_F ≥ 1.5 the term depends only on direction, and reaches its extremes of ±25√2 ≈ ±35.4 on the diagonals. Below 1.5 it scales linearly toward zero. The 1.5 is an ex-ante threshold (1.5 standard deviations), not fitted to outcomes.

Leading

F_L = 8·Z^±2(s) + 4·Z^±2(Δ²v)

(4.6)

F = Position + F_L

(4.7)

5. Market Mood (M)

Repricing and Transactions

S_P = −8·Z^±2(Δ Price Growth)

(5.1)

S_T = −4·Z^±2(Transaction Volume)

(5.2)

While S_R > 0, lean-in readings are muted: S_P = max(S_P, 0) and S_T = max(S_T, 0).

Credit

S_C = 10 · 1[national stress] · 1[local transmission]

(5.3)

National stress holds when the HY spread is at or above its 90th expanding percentile (3.3) and higher than four quarters earlier, or when SLOOS net tightening is +40 or more. Local transmission holds when

8·Z^±2(Δ Price Growth) + 4·Z^±2(Transaction Volume) < 0

(5.4)

evaluated before the S_R mute.

Replacement

S_R = 45 · min(1, max(0, (p − 0.90) ÷ 0.10)) · 1[B ≥ 0.60]

(5.5)

p is the market’s percentile (3.3) of Price ÷ Replacement. B is the share of markets with p ≥ 0.90 in the same quarter, computed only when at least 30 markets report.

M = S_P + S_T + S_C + S_R

(5.6)

6. Cycle Score (C)

C = min(100, max(0, 50 + F + M))

(6.1)

Term	Range (points)	Capped by
Position	−35.4 to +35.4	Formula (4.5)
Leading, supply	−16 to +16	Z^±2
Leading, vacancy turn	−8 to +8	Z^±2
Repricing S_P	−16 to +16	Z^±2
Transactions S_T	−8 to +8	Z^±2
Credit S_C	0 or +10	Indicator
Replacement S_R	0 to +45	Ramp

A missing Leading or Market Mood input contributes zero. Position requires both Standing and Momentum for the current and prior quarter.

7. The Hour (H)

θ = atan2(F̃_Δ, F̃_S)

(7.1)

H = 6 + 6·C ÷ 100 if θ ∈ (0°, 180°] · H = (6 − 6·C ÷ 100) mod 12 otherwise

(7.2)

The rising side is the one where blended Momentum is positive. C = 0 maps to 6 o’clock and C = 100 to 12 o’clock on either side.

Readings

All three readings are functions of H alone.

Reading	Hour bands
Fundamental Phase	Recovery [6, 9) · Expansion [9, 12) · Hypersupply [12, 3) · Recession [3, 6)
Market Mood	Disbelief [7, 8) · Optimism [8, 11) · Euphoria [11, 12:30) · Anxiety [12:30, 2) · Fear [2, 5) · Despair [5, 7)
Investment Posture	Aggressive [5, 8) · Active [8, 10) · Cautious [10, 11) · Defensive [11, 3:15) · Cautious [3:15, 5)

8. Constants

Constant	Value	Role
History minimum	16 quarters	Before any Z or percentile is defined
Excluded window	2020 Q2 – 2021 Q4	Omitted from every mean, deviation and percentile reference set
Cap	±2	All Leading and Market Mood Z-terms
Blend	0.6 / 0.4	Current / prior quarter, Standing and Momentum
Position scale	25	Eq. (4.5)
Strength threshold	1.5	Eq. (4.5)
Leading weights	8 · 4	Supply · vacancy turn
Mood weights	8 · 4	Repricing · Transactions
Credit step	10	Eq. (5.3)
HY percentile	0.90	National stress
SLOOS threshold	+40	National stress
Replacement maximum	45	Eq. (5.5)
Replacement ramp	0.90 → 1.00	Own-history percentile
Breadth trigger	0.60 of ≥ 30 markets	Eq. (5.5)

9. Limitations

Standardization uses only information available at each date, so historical readings contain no look-ahead in their inputs. The weights and thresholds are round, ex-ante values, but they were chosen with knowledge of the sample period; historical results are therefore in-sample. Decisions D4.24 and D4.26 are provisional until the first production run scores a quarter the model has not seen.

Readings describe a market as a whole. Individual submarkets and properties can behave differently.