How can you create your own real estate market analysis?

1 Define your purpose

The first step to create your own real estate market analysis is to define your purpose and goals. Are you looking to buy, sell, or invest in a property? What type of property are you interested in? What is your budget and timeline? How do you plan to use the property? These questions will help you narrow down your scope and focus on the relevant factors and criteria for your analysis.

2 Choose your location

The next step is to choose your location and submarket. Location is one of the most important factors that affect the value and demand of a property. You should select a specific area or neighborhood that matches your preferences and needs. You should also consider the submarket, which is a smaller segment of the market that has similar characteristics, such as property type, size, age, or style. For example, you can compare single-family homes in a suburban submarket or condos in a downtown submarket.

3 Gather data

The third step is to gather data from various sources and platforms. You can use online databases, websites, and tools that provide information on property listings, sales, rentals, and trends. You can also consult local real estate agents, brokers, appraisers, and experts who have access to insider knowledge and data. You should collect as much data as possible on the properties that are comparable to your target property in terms of location, submarket, features, and condition.

4 Analyze data

The fourth step is to analyze the data and calculate the key metrics and indicators. You should compare the properties based on their price, size, age, condition, amenities, and other factors that affect their value and appeal, as well as look at the market trends like supply, demand, inventory, vacancy, absorption, and appreciation. Some of the metrics and indicators that you should calculate include average price, price per square foot, price to rent ratio, capitalization rate, cash on cash return, gross rental yield, net operating income, and return on investment.

5 Adjust data

The fifth step is to adjust the data and account for any differences or discrepancies between the properties. No two properties are exactly alike, so you need to make some adjustments to reflect their unique features and characteristics. For example, if a property has a pool, a garage, or a fireplace, you need to add or subtract some value from its price. You can use different methods to adjust the data, such as the sales comparison approach, the cost approach, or the income approach.

6 Report findings

The final step is to report your findings and present your real estate market analysis. You should summarize the main points and conclusions of your analysis and provide a clear and concise recommendation. You should also include charts, graphs, tables, and visuals to illustrate your data and support your arguments. You should format your report in a professional and appealing way and use clear and simple language to communicate your message.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?