Learning your market

[Zachary Negri]

Hello BP members, My name is Zach this is my first post here on BP! I am a newbie 21 y.o. Investor from CT and want your take on the best way to learn the market around me. I know I can call and talk to real estate agents or other investors, but what tools do they use to gauge the market conditions? Are there any websites or internet databases that I am missing? All replies appreciated!

[John Hyatt]

Hi Zach,

I use a few different sites for my neighborhood. I downloaded the "realtor" app and just click the near me function and you can search for active and sold listings around you (really cool when you're traveling and just want to know how much homes are going for in the area). I am a real estate agent and use the MLS, but I have to say in my neighborhood Zillow is within about a 3% error margin. I would list my house for $170k and Zillow has it estimated at $171,800. The reason Zillow can be way way off is if their info is incorrect, such as 0 bed/2 bath or 900sqft when its really 1200sqft. Zillow doesn't take into account pools, remodels, etc (unless you own the property and go in and make the updates which most don't know how to do). Another reason Zillow can be off is if a Hedge fund or private investor buys several properties for $2m let's say it will show every house as $2m. That being said you can look at Zillow and look at recently sold comps or Realtor does the same. You should be able to get some idea of the market in your neighborhood from that or like you said ask a realtor. The nice thing about Zillows mistakes is that if you do find a 0 bed house usually the zestimate is low…so you might want to scoop those up. Depending on what you are looking to do with the house, I would also drive the neighborhood.

If you are looking to rent the houses out or sell on a rent to own I would recommend rentometer, Zillow, and realtor as they are usually within reason.

-John