How to forecast my neighborhood

Question

Hi BP community!

I was just wondering if anyone has any suggestions/articles/books on information on how to create a forecast analysis of their own neighborhood/city? I want to be able to analyze the raw data into something meaningful to give me some insight into where the real estate market trends are headed for my area. I apologize if my post is kind of confusing, as I am still a newbie in learning how to forecast market trends (or even what indicators I should be looking at that would be important to my analysis).

Any advice or reading recommendations would be greatly appreciated! :D

-Al

Matthew Fisher · Answer

Its tough to make an accurate prediction on an area as small as just a subdivision or neighborhood. However a general good predictor is where you start to see new development or predevelopment in established areas. This shows that the areas stature has surpassed the current ammenites which are offered in the area. Also see which areas have best resisited the large price declines over the past 3yrs. If a group of houses has held its value well then it will likely pop as housing recovers over the next 5yrs.

Mark Updegraff · Answer

when doing market studies google is your friend.  I know I've found a lot of data (all different kinds) that is broken out by zip code, or county.  For neighborhoods, zip code data is good.  You can also get census data to be of some help.  A lot of times research has already been done, and going through the archives can be useful.  Looking at trends that arise from historic studies can be very enlightening.  Also, find new housing and find good info on their absorption time.  Vacancy rates can be tough because places don't like to admit a true number...

Chris Calabrese · Answer

What is your purpose for doing this?  Knowing that will make it easier to give suggestions.  Robert's answer is very good, especially if you are looking at your entire market (i.e. all of San Diego county).  For investing purposes, you will need to get more specific.  In a rising market, there can still be neighborhoods in decline, and vice versa.

Your local real estate association probably compiles a lot of this data on at least a monthly basis.  If they won't release it directly to the public, you could probably find an agent who will help you.  They should be able to report on specific zip codes, subdivisions, or even streets.

Robert Adams · Answer

I am in the Las Vegas/Henderson market but I like to keep tabs on the available listings to see whether it is increasing monthly or decreasing as this affect the supply of homes. I also like to track the amount of foreclosures monthly to see if it is increasing or decreasing as this will affect the supply and prices. I also like to see how many homes are in escrow as a percentage to those homes available.

For example: 
In Las Vegas over the last 6 months available listings have been decreasing month after month. This means the inventory of available homes is decreasing month after month. Even with new foreclosures added in each month the 
number has still been shrinking.

Secondly, the amount of foreclosures has also been decreasing month after month. As this number continues to get smaller it in turn makes the number of available listings (our supply) fewer and fewer.

Thirdly, the number of homes in escrow, in pending or contingent status, in relation to the available listings has grown each month for at least the past 8 months.

What I conclude from this is that the market is absorbing the inventory faster than the new listings are becoming available. If these trends continue we will begin to see the Las Vegas / Henderson market really start to improve.

How to forecast my neighborhood

Most Popular Reply