Guide to Efficient Real Estate Market Analysis
Learn how to use up-to-date info and the newest technology to analyze the real estate market quickly and effectively.
Real estate market analysis is gathering and analyzing all the essential data you need to make intelligent choices about whether to buy, sell, rent, or develop real estate.
Comparative market analysis (CMA) is a type of real estate market analysis that compares the features of a property to those of similar units in the same area. Real estate agents often use CMA to determine the fair market value of private homes. CMA can also help buyers and sellers decide how much to ask for a house before they put it on the market or how much they are ready to pay for a home in a specific neighborhood.
Professionals in commercial real estate (CRE) use a more complex form of market analysis to develop and analyze investment strategies, deals, and the best ways to use land parcels to make the most money. A commercial real estate market study tries to find and look at many different types of data to answer questions like
Before doing a real estate market study, you must be clear about your goal. Is the main objective to build wealth by buying property that will increase in value over time? If not, is the main goal to find the best market to open a store or build a rental property to make money immediately? The specific purpose of the study is to tell us what factors to look at and how much weight to give each one.
But complex data is essential no matter what the main goal is. This guide will talk about the best ways to do a commercial real estate market analysis. It will also look at how agents, owners, and buyers can use location intelligence to make real estate market analyses more accurate and help them make better CRE decisions.
Two main types of factors go into a real estate market analysis: factors that affect the market as a whole and factors that affect individual properties.
Everyone knows that location, location, location is the most essential thing in real estate. Real estate market research needs to look at a lot of data about the more significant areas where possible properties are located, even before it looks at data about specific properties. The following are some of the most essential pieces of information used in market-level analysis:
Prices of homes and the number of people living in them: How do the vacancy and rental rates in this area compare to those in similar places? Are prices and rents going up or down?
In addition to market-wide factors, real estate market analysis should account for various factors, precisely the properties under consideration. Some of the elements that should be considered include:
If your main goal in buying a home is for its value to go up over time, looking at the above factors can help you evaluate possible real estate deals and determine if a sure home will likely go up in value at a reasonable rate.
But if the goal is to make rental or more immediate income, several other metrics will help you compare different chances and determine which will make you the most money. This is not a complete list, but here are some of the most important ones: