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While the United States President promised his people and the world that the American government is only trying to level the playing field in the trade industry with their new policies for 2017, the economy grew to a considerable rise of 2.3% based on a data from the Commerce Department. It’s not nearly where the 3% target the president had spoken of for his first term but it is something, considering that it’s well ahead of the 1.5% growth in 2016, which means, overall, the economy is well and fine, healthier than you may have expected. You may also see analysis templates.
The average consumer has its spending confidence at an all-time high since the year 2000 and unemployment rate reached a good old new low for the first time in 17 years. Is the country on a roll? Let’s not get ahead of ourselves. We’re not quite there yet. But here’s more good news. The economy, (all thanks to tightened housing inventory and consumer demand) has made the real estate market great again, especially in the country’s fastest-growing cities.
Real estate experts are predicting a consistent growth in the market for 2018. Although brokers, buyers, and sellers can’t really expect the movement of the real estate market to be as rapid as last year, it might be a good idea to invest on the property or sell years when the market value is something you can work around with. Then again, it would also make a big difference if you dedicate careful planning property you’re interested in owning.
The real estate market analysis is a “test” or observation of prices at which properties similar to what an owner is selling or what a buyer is looking for in the same area recently have sold. Ideally, real estate agents and brokers conduct this analysis so that clients can properly determine a price to write down when selling a residential property or a price to offer when buying one. Since properties are different, agents make necessary adjustments to pricing for the differences between properties soled and those that are to be bought or listed to come up with a final fair offer or sale price.
A real estate or comparative market analysis is sometimes seen as a less sophisticated version of a professional appraisal but it’s not. This is because an analysis is not a legal document and has no financial value while the house appraisal is a process done to when the monetary value of a real estate property is needed for a professional transaction, legal settlement, etc.
Whether real estate investors are lacking the skills and knowledge it requires to complete a market analysis not only for their client but also for their own reference, or just fail to understand its benefits, in truth, it is the most important part in the process of evaluating a real estate investment. The market analysis makes up the foundation for whatever calculation and decisions follow after, so doing an extensive research and having a good understanding of the current market in a certain location is very crucial to a good decision-making. You may also see sample real estate marketing plan.
The real estate market analysis is also important to help you determine the real value of the property you invested on, including its rental income if you should lease or rent it out, or if you are going to become a tenant. In other words, in a renting market, it can also help you figure out a price list for charging rent or for accepting a certain renting rate of a potential landlord. It is also very important in getting a good listing price for your house or property if you consider yourself a real investor who wants to bank on purchasing real estate properties and selling them out to gain profits. You may also see competitor analysis templates.
But of course, you have to keep in mind that whatever the current listing prices are in the market, they’re not 100% accurate as they depend on estimations. Most of the time, the sellers’ end of the market tries to get the highest prices. The buyers’ market o the other hand, prefers the lowest prices when it comes to property value. You may also see marketing analysis templates.
For example, what are the major characteristics of the property you’re investing on? What are the takeaways? Get specific. Check the property size in terms of square footage, number of bedrooms, floors and bathrooms and how old the house is, along with its biggest amenities such as pools, lawns, fireplaces and even the backyard. These are all very important especially when you look at similar properties with similar features. You may also see sample industry analysis templates.
You have to understand that location plays a big part in a buyer and seller’s decision. Analyze the property according to its location in the community. When analyzing location, you can either use google street view or assess it from your own point of view. Make your own judgment about the location. Is it accessible to the community’s main establishments like schools? Is it close to the main road and public transportation? What about dining and places of recreation? Would it be attractive enough for the millennial buyer? Would your Average Joe be interested living here? You may also see sample market gap analysis templates.
For a broker, helping out a real estate investor would take looking beyond the property’s obvious features. Comparison for the market should take these things into account:
Demographics defined, are the data describing what makes up a population, such as age, race, gender, population growth, income status. These are very important statistics which gets put on the back burner but affects the real estate pricing and what types of properties currently have a high demand. You may also see sales analysis templates.
Major demographic changes of a country can have a very big impact and may well define the real estate trends for years, even decades. Consider the baby boomers, for example, people who were post-war babies which would now make up your senior citizens. They are an example of a major demographic shift since they are set to retire and the transition may affect the real estate market on a large scale. You may also see sample needs analysis templates.
Interest rates should also be considered when analyzing what drives the real estate market. If you are thinking of buying a house on a mortgage, researching on current interest rates with a mortgage calculator would be better, especially that interest rates changes affect a person’s spending ability for a residential property. This is because the lower the interest goes, the better it is to obtain a mortgage to purchase a house which then creates an increased demand in the market which would naturally set the prices up again. It’s important to remember that as interest rates increases, the cost to obtain a mortgage in turn also rises as a response, thus lowering the demand and prices of real estate. You may also see sample analysis templates.
Not many people realize the fact that real estate takes up a significant part of most people’s wealth and the American homeowner is proof of this. Based on the recently conducted Survey of Consumer Finances by the Federal Reserve, 65.2% of American families own their residence, which means the real estate market’s scale and size, never mind its occasional unpredictable movement, is such an attractive, even lucrative industry for many new and seasoned investors, and rightfully so, since it provides everybody involved, with great opportunities, especially with a careful analysis to back up decisions in buying, selling and renting. You may also see competitive analysis templates.