GDP
Why it is important?
No matter in global market or local market, competition of a market stands for its economic power and indicates its current position and future potential. Therefore, GDP is frequently referred in the beginning of general research reports.
Strengthens/ Weakness
For example, in the Q3 of 2016 real GDP expanded at a 3.5% annual rate which is the strongest growth rate in two years and more than triple the rate of growth for the first half of 2016. But the flaw is that GDP is too generic to support a deep research, especially for a specific area or period.
Resources
World Bank (data.worldbank.org) can provide information about GDP by countries.
Exchange Currency Rate
Why it is important?
From an international scope, exchange currency rate is a significant indicator of attractions to the (overseas) investors.
Strengthens/ Weakness
While its weakness is that currency would be a double-edged sword. When the dollar continues to strengthen against a basket of foreign currencies, that sword will cut the foreign investors out.
On the one hand, foreign buyers increase the diversity of the potential homebuyer pool, pushing up the demand that can be very helpful in minimizing the effect of localized recessions on housing markets. But affordability and inventory can suffer – particularly in very desirable urban areas, if foreigners purchase homes in the U.S. without the intent of relocation, thereby removing these properties from the market. So, when using exchange currency rate in research, its two sides of effects must be considered.
Resources
Exchange currency rate can be obtained by international finance websites or currency information website, e.g. XE (http://www.xe.com) where you can review the currency chart for selected periods.
CPI
Why it is important?
In a nationwide, CPI inflation can be seen as a consequent reaction after exchange currency rate. A strong domestic currency can decrease the inflation rate in a nation, because of lower prices for foreign products. A study of the correlation between various asset classes and inflation shows that real estate returns have the highest correlation.
Strengthens/ Weakness
While in the real economy, there are a lot more factors that affect house prices and the correlation is not as prominent as in our example. So for a thorough research, these factors and their chain reaction cannot be ignored.
Resources
Information about these indicators can be obtained from most major financial or research websites and US Department of Commerce, Bureau of Economic Analysis.