How to Analyze a Market

[Derek Morrison]

So I'm, trying to analyze a market to invest in. I've heard that job growth and population growth are two important factors (i.e. you don't want to invest in a town where the population is declining 7% per year and job growth is negative).

Here's what I'm wondering:

Let's say you look at historical data and finding that Houston, Texas had 15% population growth (for example) over the past 5 years. Ignoring other factors, is that good? Or does it mean that you missed the bus for investing in Houston, and the population growth is likely to slow and regress towards the mean? I know there's a lot of factors involved in determining a market's desirability for investments, but on a very basic scale, is finding historical data that reveals such strong metrics in a market a sign to invest, or does it signal that the market is now hot?

[Tom Shallcross]

@Derek Morrison - great question.  Joe Fairless does a great job of outlining all the different factors to consider in a market.  More direct to your question, he also provides great resources.  Below are some of his recommended reports and a few of them not only present data from recent history, but also provide a forecast for the near future:

Marcus & Millichap’s Annual US Multifamily investment Forecast

CBRE Biannual Cap Rate Survey

IntegraRealty Resources Annual Viewpoint Commercial Real Estate Trends Report

Zillow Annual Consumer House Trends Report

RCLCO Quarterly State of Real Estate Market

PwC Annual Emerging Trends in Real Estate