When it comes to buying a home, you need to know all the factors. Which is where real estate market research comes into play. Real estate market research will make your search easier, more effective, and have better outcomes. Whether you are a first-time buyer or a seasoned veteran buying commercial real estate, market research can help you. In fact, we recommend it as a necessary step for all potential buyers. Here are the four steps to researching a real estate market and how it can help you.
Defining your budget is a crucial part of any home-buying process. You need to have realistic expectations about the housing and communities you can afford. How do you do this? By finding the median price of a home in a specific market. To do this, you need to use tools like the NAR (National Association of Realtors) and data provided by the United States Census. The data provided by the census will give you an overarching view of the state of your choice. It will give you the average median wage as well as the average price for a home. The NAR Data will then break that down into specific counties. That specific county data can be used as a starting point when looking for a home.
Remember, a specific county can hold multiple cities within it which can affect the price. It’s a good starting point but not as accurate as you need it to be when it comes to real estate market research.
Next, you’ll want to go further with your research. Start searching trends for specific cities. Look for data on areas in a city that is growing. Why is this important? A city or town that is growing most likely means that your property values are going to increase as more resources are centered around where you live. For practical reasons, people would pay more to only have to drive 5 minutes to work.
Real estate market research is all about following trends. Start to look for trends of growth in your area. You’ll want to look for things like new businesses, new parks, and new community centers, population growth, and more. You don’t have to know every single detail, but a general knowledge of the area can help you understand if you are about to make a good investment or not.
Again you’ll want to narrow your real estate market research even further. Start looking up communities and the average price of a house in those neighborhoods. Calculate the average cost for a home that includes price per square footage. For example, let’s take 4 houses in a given neighborhood:
House #1: 200K and is 2500sq. feet
House #2: 250K and is 28000sq. feet
House #3: 180K and is 2000sq. feet
House #4: 225K and is 2700sq. feet
Next, you need to find the price per square foot.
House #1= 200K/2500 = $80 per sq. ft.
House #2= $89 per sq. ft.
House #3= $90 per sq. ft.
House #4= $83 per sq. ft
You then find the average of those numbers which amounts to this neighborhood having an average price of $85.5 per sq. ft. or $213,750 for a 2500 square foot home. Next, start looking at what is close to your neighborhood. Will you have quick access to things like grocery stores, hospitals, pool areas, and more?
The last piece of the puzzle when it comes to real estate market research is to talk with a real estate agent. Not only will they have all of this information at their fingertips, but more. They can point you in the right direction regarding school zones, crime rates, and other factors when shopping for a home. If you want to make the best decision and have the most accurate information, then a real estate agent is your best bet. They can help you find not only your dream home but a great investment as well!
Are you trying to do market research about the homes in your area? If so, we’d like to talk! At MWT Realty, we can help guide you through the real estate market and help you get the best deal possible. Contact us today to learn how we can help you!