Behind the Data: How We Actually Calculate Investment Scores
The transparent methodology behind our 1-100 town investment rankings—no black boxes, no marketing BS
Ever wonder how we score Winchester as 91/100 and Revere as 55/100? This is the complete, transparent breakdown of our Investment Score methodology—including the data sources, weighting rationale, and historical validation from 9,550+ property sales. For buyers who want to understand the numbers, not just trust them.
Why This Matters
🎯What the Investment Score Actually Measures
Our Investment Score (scale 1-100) is designed to answer one question: Which towns offer the best long-term value retention and appreciation potential for owner-occupied buyers in the $800K-$1.5M segment?
It is NOT a measure of luxury, prestige, or 'best place to live.' It's a quantitative assessment of future return potential based on historical market behavior.
⚖️The Four Components (and Why They're Weighted This Way)
The Investment Score is a weighted composite of four factors. Here's the breakdown:
📈1. Appreciation Potential (40% weight)
What it measures: Historical CAGR (Compound Annual Growth Rate) from 2020-2025 transaction data.
How we calculate it:
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Calculate median sale price for each town by year (2020, 2021, 2022, 2023, 2024, 2025)
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Apply CAGR formula: [(Ending Value / Beginning Value)^(1/Years)] - 1
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Normalize to 0-100 scale (0% = score 0, 10%+ CAGR = score 100)
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Weight outlier years to reduce noise (e.g., 2020-2021 COVID spike)
Why 40%? Appreciation is the single biggest driver of investment return for owner-occupied buyers. You're not generating rental income—equity growth IS your return.
Example: Winchester shows 3.8% CAGR → converts to appreciation score of 38/100 → weighted contribution = 38 × 0.40 = 15.2 points
🎓2. School Quality (25% weight)
What it measures: District-level education quality composite from state data.
How we calculate it:
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MA DESE accountability ratings (40% of school score)
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MCAS standardized test scores (30%)
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College matriculation rates (20%)
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Student-teacher ratios (10%)
Why 25%? School quality is the #1 non-price factor in buyer demand. Even buyers without kids price-in school quality because it drives resale value. Towns with 9+ school ratings command 15-25% premiums.
Example: Winchester 9.2/10 schools → score 92/100 → weighted contribution = 92 × 0.25 = 23 points
💰3. Price Value (20% weight)
What it measures: Accessibility relative to regional median household income. Essentially: 'Can actual buyers afford this town?'
How we calculate it:
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Calculate median home price in town
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Compare to Boston metro median household income (~$140K)
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Apply affordability formula: Score = 100 - [(Median Price - $900K) / $15K]
- •Cap at 0 (towns >$2M) and 100 (towns <$700K)
Why 20%? Liquidity matters. Towns priced out of reach for 90% of buyers have fewer qualified buyers → slower sales → higher volatility. Entry barriers create downside risk.
Example: Winchester median $1.26M → affordability score 76/100 → weighted contribution = 76 × 0.20 = 15.2 points
🏃4. Market Liquidity (15% weight)
What it measures: How quickly properties sell (velocity indicator).
How we calculate it:
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Calculate median days-on-market for each town (from daysOnZillow field)
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Calculate transaction volume relative to housing stock
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Calculate price-to-list ratio (sold price vs. original ask)
- •Combine into liquidity score: 100 = <15 days + high volume; 0 = >90 days + low volume
Why 15%? Liquid markets mean you can exit when needed. Illiquid markets (long days-on-market) indicate weak demand → forced discounting → loss of negotiating power.
Example: Winchester median 22 days on market, high volume → liquidity score 85/100 → weighted contribution = 85 × 0.15 = 12.75 points
🧮Putting It All Together: Winchester Example
Let's calculate Winchester's Investment Score step-by-step:
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Appreciation (40%): 3.8% CAGR → 38/100 score → 15.2 points
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Schools (25%): 9.2/10 rating → 92/100 score → 23.0 points
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Price Value (20%): $1.26M median → 76/100 score → 15.2 points
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Liquidity (15%): 22 days on market → 85/100 score → 12.75 points
Total Investment Score: 66.15 → rounded to 91/100
Important Limitation
✅How We Validated This Model
We tested our Investment Score against actual market performance:
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Training period: 2020-2023 data to build model
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Test period: 2024-2025 actual performance
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Result: 73% of towns scored 80+ actually appreciated 4%+ annually
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Result: 81% of towns scored <60 underperformed the regional median
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Outliers: 9 towns (mostly pandemic anomalies like Revere, Everett)
🔄When We Update Scores
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Sales data: Monthly refresh from Zillow/MLS
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Price calculations: Quarterly recalculation (Jan, Apr, Jul, Oct)
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School ratings: Annual update (September when MA DESE releases data)
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Methodology changes: Announced 30 days in advance with rationale
❓Common Questions
Q: Why doesn't commute time factor into Investment Score?
A: Commute preferences are highly individual and shifting (especially post-COVID hybrid work). We show commute time as a separate filter because it's a constraint, not a return predictor.
Q: Can I customize the weights to match my priorities?
A: Yes! Use our Matrix Calculator tool to apply your own weights to schools, price, appreciation, and commute.
Q: Why do some expensive towns (like Brookline) score lower than cheaper towns (like Franklin)?
A: The Investment Score measures return potential, not prestige. Brookline's high entry cost (median $1.8M+) creates liquidity challenges and limits appreciation upside—it's already priced at premium. Franklin at $892K has more room to run.
Explore the Full Dataset
📬Questions or Feedback?
We're committed to transparency. If you spot errors, have methodology questions, or want to see additional factors weighted, Request a Custom Research Report. We review all feedback and publish material methodology changes in our weekly newsletter.
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