Method for valuing forwards futures and options on real estate

A method for providing indices for real estate transaction values, comprising:

• a. for each day, performing a survey of actual real estate transactions and real estate transactional activity executed on said day, in a local region;
• b. for each day, using a computer to generate a daily cash index of real estate transaction values in the local region based upon the survey, the computer performing the steps of compiling the data obtained from the survey of actual real estate transactions and real estate transactional activity into a series of data points, manipulating the series of data points by statistical tools to create a normal distribution of rate prices per unit area;
• and calculating the price per unit area for the local sector;
• the price per unit area for the local sector being usable as a cash mark to market settlement value.

A method for providing indices for real estate transaction values, comprising:

• a. based upon historical data, generating monthly cash indices of real estate values in a local region for each month of at least 10 prior years;
• b. generating an initial volatility value based upon the monthly cash indices over said at least 10 prior years;
• c. for each day, performing a survey of actual real estate transactions and real estate transactional activity executed on said day, in a local region;
• d. for each day, using a computer to generate a daily cash index of real estate transaction values in the local region based upon the survey, the computer performing the steps of compiling the data obtained from the survey of actual commercial real estate transactions and real estate transactional activity into a series of data points;
• for each day, manipulating the series of data points by statistical tools to create a normal distribution of rate prices per unit area;
• and for each day, calculating the price per unit area for the local sector;
• the price per unit area for the local sector being usable as a cash mark to market settlement value;
• e. for each month, aggregating the daily surveys on a monthly basis to generate a monthly cash index for said each month;
• and
• f. updating the volatility value based upon each monthly cash index generated in step e as a measure of historical performance.

A method for providing indices for commercial real estate transaction values, comprising:

• a. each day, performing a survey of commercial real estate transactional activity on said day in a local region;
• b. each day, using a computer to generate a daily cash index of commercial real estate transaction values in the local region based upon the survey, the computer performing the steps of compiling the data obtained from the survey of commercial real estate transactional activity into a series of data points;
• for each day, manipulating the series of data points by statistical tools to create a normal distribution of rate prices per unit area;
• and for each day, calculating the price per unit area for the local sector;
• the price per unit area for the local sector being usable as a cash mark to market settlement value;
• c. each month, aggregating the daily surveys on a monthly basis to generate a monthly cash index;
• d. generating a volatility value based upon the monthly cash indices over a plurality of years as a measure of historical performance.