How To Conduct A Market Analysis As A Realtor

In the past few weeks, we have been discussing tips on how to be a successful realtor. If you haven’t been following, no worries, you can catch up on all the gist here. In this article, we will be covering another essential part of being a successful realtor: conducting a market analysis. 

As a realtor, conducting a thorough market analysis is essential if you are aiming to provide your clients with accurate and insightful information about the market. A thorough market analysis helps realtors understand the real estate market, identify trends, and make informed decisions. 

What is Market Analysis in real estate? 

Market analysis involves evaluating the different factors that influence property values. There are different factors that can affect property values and they include; economic factors, neighbourhood features, and increased or reduced demand and supply among other things. 

All these factors help realtors determine the state of the market, understand where to encourage investment and predict future trends. For example, 5 years ago, Epe wasn’t exactly the top priority for investment but today, Epe is one of the biggest in the real estate market due to its modern infrastructure, growing commercial presence and environment. 

How to conduct a market analysis

1. Define Your Objectives

This step is often overlooked by many realtors and they end up in a state of confusion because their goals are not well defined. 

Before doing any data collection, it’s crucial to define the objectives of your market analysis. Are you assessing the market to help a client buy or sell a property? Are you evaluating investment opportunities? Clear objectives will guide your research, focus on relevant data and help you avoid confusion. 

2. Gather market data 

This step is the second and another important part of an effective market analysis. There are different ways to gather data and some of them include the following: 

• Check out Multiple Listing Services (MLS): There are different types of Multiple Listing Services in Nigeria and they include: PropertyPro, Nigerian Property Center, and Private Property among others.

What an MLS does is to help realtors find homes that are affordable and good for investment. Most MLS sites are created by real estate professionals and are usually free. Look out for details such as listing prices, environment, the days on the market and property features. 

• Study the Economy: The economy plays a very important role in property value. If the economy is Favourable, the income level will increase as well as the population thereby influencing housing demand and market conditions. 

Review market reports from real estate organisations, financial institutions, and research firms. These reports often provide valuable insights into broader market trends and forecasts.

• Study the neighbourhood: The neighbourhood where a property also plays a part in the market prices. 

It is crucial to evaluate the neighbourhood characteristics, including school quality, crime rates, amenities, and transportation options. Neighbourhood desirability plays a significant role in property values.

3.  Evaluate Market Trends

The market usually follows a trend and analysis helps to predict future conditions and make informed decisions. Some trends that can be considered are: 

– Price appreciation: Check if the property value in an environment has risen in price within the last 5 years and the increase rate. This can give realtors an idea of how to guard potential price increases.

– New Construction in the area: Construction projects such as roads,  stable electrical and influx of new houses can affect demand and supply in a particular location. 

4. Assess Market Sentiments 

This step is where realtors understand market sentiments; gauging the perception and attitude of buyers and sellers to a particular location or property. The following are some ways to assess market sentiment:

• Surveys and Polls on the internet and locally. 
• Real Estate social media and forums 
• Agent Feedback and Insights
• Comparative market analysis 

5. Identify Opportunities and Challenges

The analysis done from the steps earlier stated can help to identify opportunities and potential challenges in the market. Many individuals overlook the rapid transformation that can occur in emerging neighbourhoods. What might be a forest today can become an urban environment within just five years once civilisation and development take root. Epe, a rapidly developing area in Lagos, is a good example of this phenomenon. Investing in such emerging neighbourhoods can yield substantial returns in the long run.

6. Stay Updated

A successful realtor must always be willing to work hard to stay updated because the real estate market is dynamic and constantly evolving. Staying updated helps realtors make informed decisions for their clients and improve their overall business performance. 

To stay updated, realtors and investors can participate in online courses and workshops to stay informed about industry trends, new technologies, and best practices. Viewing market reports is also important; subscribe to newsletters like BO properties newsletters to get updates from time to time. 

7. Provide Actionable Insights

The last step after conducting a market analysis is to inform your clients about action plans from their end based on your research.  

Realtors should endeavour to compile their data into comprehensive but easy-to-read reports. This will help make the information more relatable and digestible. In this report, realtors can provide specific recommendations for clients on when it’s best to buy or sell, potential investment areas and pricing strategies. 

Reports should be clear and concise with pictures, graphs and charts that explain findings in a simple manner. Avoid jargon and technical terms that may confuse your clients. Use plain language to explain your analysis and recommendations.

How To Stay Relevant As A Realtor

1. Use Reliable Data Sources: Realtors don’t pick information from everywhere because many information sources don’t have accurate data.

Ensure that the data you use is accurate and from reliable sources. Inaccurate data can lead to flawed analysis and misguided recommendations.

2. Be Objective: Maintain objectivity throughout your analysis. Avoid letting personal biases or opinions influence your findings.

3. Stay Updated: Markets can change rapidly. Regularly update your market analysis to reflect the current data and trends. This will help in giving up-to-date decisions to clients. 

4. Leverage Technology: Utilise technology tools and software to streamline your analysis. Tools like MLS databases, data analytics platforms, and visualisation software can enhance your efficiency and accuracy.

The ability to conduct a thorough market analysis cannot be overemphasised.  By staying updated with the latest developments and continuously honing analytical skills, realtors can position themselves as trusted advisors and experts in the field, ultimately driving success for clients and their real estate business.