Understanding Large-Scale Market Trends

[Jason Carrillo]

Hi Bigger Pockets Family, I'm a newbie wanting to start a discussion on how to understand general market trends. I'm excited to start analyzing deals, yet this laser targeted approach can be potentially useless without first understanding the "big picture" of the market. 

Better to plant a tree in a forest where you can understand the basic information of the forest - such as type of trees, weeds, potential land grabs and lumbering operations, etc. That way you can be confident the tree will not just survive but thrive.

I recently listened to a youtube video by Ken McElroy where he made some projections based off of some recent market data - he projects that because of the massive amount of delinquent mortgage payers, and even higher number of loan forbearances, that home supply will increase a lot in the end of Q4 2021. 

I at least understand the basic supply and demand curve and how prices move up and down according to demand and supply. McElroy explained that the supply of houses will likely go up because many people will not be able to pay off their loans, if no new policy is introduced or and no new loan products are made available for the times we are in.

This is the sort of top level stuff that can inform strategy.

I want to ask the following questions and hear your thoughts on how to do the following:

1. Where can someone find market data for countrywide trends? I imagine it's routine for an investor to be looking at current events/policies and market trends. But I'm not sure where to find that type of information.

2. Once that data is gathered, how can one synthesize all this information into actionable information to inform local market investment strategy? For example, I don't know how a nation-wide increase in housing supply will impact local markets.

3. Perhaps there is a book on this you've read, or resource you know about that could further help. 

Here are some great tips to look out for in local markets, from a guest on the podcast:

• population growth
• Job growth
• Job diversification
• Rent growth
• Competitive advantages an investor may have

But i'd be interested to hear how to connect the above data with higher level market data in order to inform local market strategy.

In summary, I want just want to be able to know what markets to invest in and why ;)