Professional real estate investors put so much effort into real estate market research to better understand their market prior to investing.
Those who invest without analyzing
their market are often hard-hit when they're unable to turn a profit! It is, therefore,
important to take the time to conduct real estate market research.
The experienced real estate investors do not enter markets unknowingly. They only do that after they know that the market has got strong indicators of growth.
There are many ways in which real estate market research is done. Investors use facts and history of the market to foresee future growth.
To get started with conducting real estate market research, you need to understand the market indicators and their meaning.
A bit of economics might be essential to understand supply and demand concepts.
However, it is not that complicated to do that analysis.
Real Estate Market Research
Normally, real estate tends to be more expensive when demand is high and inexpensive when demand is low. All these concepts need to be understood when conducting your market research.
Take consumer confidence into account before you enter a given market, the rate of unemployment, population in the area where you want to invest, and growth indicators. Such as a new Amazon plant, or Walmart store!
Here's a short list of market indicators:
If consumer confidence is high in a certain market, then your investment could be successful. If, on the other hand, consumer confidence is low then it may require greater due diligence.
This means those consumers are not sure about the future growth of the economy. This, therefore, indicates that the market targeted has a least number of potential buyers of real estate.
The National Association of Realtors is a source for statistics to see consumer confidence level. There are scores that are used to evaluate the consumer confidence in conducting real estate market research.
2. Unemployment Rate
High unemployment rate is an indication that you should not invest in a given market. Many people do not have money to purchase property now (this is also an indicator of a strong rental market), so wait until the rate goes down so that you can invest.
Low unemployment rates indicate that it is a good time to invest in real estate in a particular market. These statistics can be found easily through government websites.
3. Population Growth
A population that is growing above the average rate for a given market, is also, a good indicator of real estate market research. This high number indicates a growing demand for real estate in that particular area. You could invest in given market based on these population indicators.
4. Interest Rates
Low interest rates are usually a good indicator that buyers could be in the market to purchase a home.
Below you'll find a list of resourceful pages: