How The Pros Create Real Estate Market Analysis Reports
Casa Priakos, Mexico. Image Courtesy of One Fine Stay.
Real estate is booming worldwide and, along with it, market research and analysis.
IMARC Groupโs latest report indicates that the global real estate market is projected to reach USD 8,690.7 billion by 2033, with a compound annual growth rate of 1.81% between 2025 to 2033. For real estate investors, developers, consultants, buyers and sellers to minimize risk and maximize opportunity during that time, they need to know and understand their local markets.
Market reports are about more than just hard data; itโs the interpretation of that data that can makeโor breakโa decision. A 2021 KPMG survey found that only 5% of real estate companies have a dedicated data strategy, with just 3% appointing a Chief Data Officer to lead transformation efforts. Similarly, Deloitte reports that while data analytics can enable faster decision-making and better risk management, many real estate professionals are still in the early stages of adoption. This gap demonstrates that many professionals are still figuring out how to effectively utilize market data.
Making conclusions based on data is more an art than a science, but that shouldnโt scare you away: a market analysis, when done right, can be vital to shaping your real estate investment strategies. Whether youโre thinking of performing your own analysis or bringing in an expert, hereโs what you need to know to get started.
Whatโs a real estate market analysis?
A real estate market analysis is based on the information you need. For example, it can be:
A look at the supply/demand of luxury properties in a specific region
The creation of customer personas who purchase a specific type of investment property
Looking at the price of properties over time and forecasting growth in a specific niche
Comparing various properties to analyse the best option for future investment
Why should you do a market analysis?
There are a lot of reasons for doing a market analysis. It can:
Provide input during project planning
Provide input for financial feasibility studies
Demonstrate the potential for a new location
Reveal what customers want
Attract investment
Provide input on developing a community or housing complex
How does market analysis fit into real estate development projects?
Real estate developers donโt go into new projects with their eyes closed. Their decision on a location or type of business is based on consumer interest rates, potential rate cuts, competitor advantage, and the likelihood of a greater return on investment.
A feasibility study gathers all this information, which is helpful in uncovering any potential problems, determining if a project is worth the investment and driving business, luxury real estate marketing, and sales strategies.
How does market analysis fit into real estate investing?
Knowing how to analyze real estate markets isn't just part of real estate investingโitโs the most important part. Researching and understanding the market is crucial, and that information will form every decision that follows.
Who uses market analysis?
Real estate developers, government officials, investors, lenders, tenants and buyers are among those who use market analysis to make decisions.
How do you analyze a property?
There are different ways to analyze a property. For investment or purchase, for example, you can take a top-down approach by looking at the market, neighborhood and then property level.
You should be comparing neighborhoods and cities in your real estate analysis, for example, and looking at things like average days on the market, inventory levels, average home age, the average sold price per square foot and list-to-sale price.
Eventually, youโll need to assess the property and the situation since homes in the same area could vary widely in their investment appeal depending on the circumstances.
Villa Peduzzi, Italy. Image courtesy of Haute Retreats.
What are the steps for an effective real estate market analysis report?
Curious how to do a real estate market analysis and report? Below, weโll break down the steps necessary for creating an excellent real estate market report.
1. Identify market trends
Hereโs how to research real estate markets: Compare properties with similar features, locations and types to determine a range of home prices or a listing price. Use data published from reliable sources like the Housing Price Index (HPI), or look for state- or city-level info.
One real estate market analysis example is the UK HPI, which captures changes in the value of residential properties and uses sales data collected on residential housing transactions, whether for cash or with a mortgage.
Market trend information can be used to advise potential sellers on the achievable selling price of their property, assess the number of people in housing need and whether to purchase or build property to meet that need and assess whether and where demand for housing exists.
2. Supply and demand
One of the key indicators of property value is basic supply and demand, as property availability and buyer demand directly impact sticker prices.
To determine supply and demand as part of your real estate market research, we can look at building permits, housing starts and new home sales data. Building permits predict the number of new housing starts, new housing starts predict the amount of new home sales and then the cycle repeats.
This info is published monthly in the US and offers reliable real estate development market analysis and parameters for predicting housing market health.
When housing inventory increases, there can be more options for buyers, which potentially leads to competitive price adjustments. Although, limited supply often drives prices up. Keeping up on these supply and demand factors helps real estate professionals determine better pricing.
3. Pricing
You can analyze the price of residential and commercial real estate properties by first researching the median price in the cities where you want to invest. You can then do an analysis based on the quality of construction, amenities offered, desirability of the neighborhood, location and more.
4. Legal requirements
Study and verify the documents pertaining to the residential or commercial property itself including:
Title documents
Nature of the title. Is the property on lease, freehold, or does it have development rights?
The identity of the seller
Land use permissions
Construction approvals
Status of tax payments
Compliance with real estate regulations
If youโre entering into a new international market, make sure you understand the laws around real estate ownership. For developers, make sure development is permitted.
5. Data collection
All the steps we already mentioned will only work if data is collected properly. You can use data (demographic data like population growth or unstructured data such as video and images) to determine the age and condition of a building and get reliable information on the types of renovations and redesigns done. When it comes to where to collect data, we recommend government-published sources.
6. Reporting
Once you present all your data to investors, developers, buyers and sellers, they can analyze it and use that to make decisions. However, raw data can be hard to interpret, so we suggest working with an analysis expert.
6 Expert Tips For Real Estate Analysis in 2024
In this section we will evaluate the most recent tips and trends for real estate analysis. While the basic tenants of real estate analysis remain similar year over year, the key factors shaping the industry will shift. Certain global policy changes or economic patterns from 2024 are revealing what real estate professionals should monitor in 2025 and beyond.
Hereโs what to keep an eye on:
1. Assess Regional Market Dynamics
Real estate markets vary widely across regions, even between cities in the same state or country.
For instance, between cities in Texas, there can be opposing trends. In Atlanta, Dallas, and Orlando, real estate markets are projected to see substantial hikes from business developments and population growth. On the other hand, the city of Austin is seeing a decline in prices due to a slow down of population surge.
2. Consider Economic Indicators
When analyzing a real estate market, economic conditions of the population, such as employment rates, rate of wage growth, and consumer confidence can indicate if property values are trending up or down.
For example, areas with strong job markets, like New York, London, or Hong Kong, also have robust economies that stimulate property value appreciation. Such economic indicators help real estate professionals gauge market health.
3. Stay Informed on Policy Changes
Changes in government policies, like shifts in tax regulations, mortgage rates, or zoning laws, can also shape market dynamics. We can look at Victoria, Australia for example. In Victoria, recently implemented taxes on holiday homes have led to a wave of property sell-offs that have impacted property supply and demand dynamics, as well as buyer confidence.
4. Leverage Technology and Data Analytics
As technology advances, real estate professionals are turning to new capabilities AI and data analytics. One practical application is projective analysis. This is when a real estate professional provides an analytical system with a large amount of data, such as current property valuations, migration ratios, or household income at a particular time or place.
Then, the software can look into the patterns in the data and derive insights as to what future conditions might look like. These predications can be valuable for informing real estate decisions such as which neighborhoods to invest in.
5. Understanding Buyer Preferences
Analyzing buyer trends can reveal if there is a growing demand for certain features like smart home technology, work-from-home space, and energy efficient design. By noting what features are in high demand, real estate professionals can upgrade the amenities of their properties to increase appeal, and therefore value.
6. Analyze Long-Term Trends
Beyond the immediate market conditions in 2024, it is wise to consider the long-term trends of certain populations as they relate to urbanization, digitalization, and demographic shifts. These large scale movements will influence future demand and property values. By tracking the macro trends, a real estate professional has a wider view of their long-term strategy.
Casa de Las Palmas, Mexico. Image courtesy of Maya Luxe.
How can Proven Partners help?
With decades of global real estate development expertise, we provide the sharp insights and strategic guidance essential for a market analysis that draws key investors and propels your business plan.
Whether youโre evaluating your hotel projectโs potential, raising capital, or planning a restructure, letโs discuss how we can help you achieve your goals.
