It had been a key point and a tough work to verify the warning limit of urban housing market for those who research the housing market. The warning limit of domestic housing market was based on the change rate of its own indicator. It deviated from the changing trend, and diverged from the real feeling of our people. This research adopted systematized method and signal light system, and Taichung City was selected for a case study. The research result showed that it was practicable to apply the systematized method to researching warning limit of urban housing market. Therefore, it was suggested that the systematized method should be used as an auxiliary method on researching the warning limit of urban housing market so that the early warning function of urban housing market could be perfect.