How to Predict Real Estate Trends
March 8, 2018 |
Ah, the mystical realm that is real estate trend prediction. It’s full of fortune tellers and doomsayers and rarely do the so-called experts agree. However, getting a handle on current trends is not as hard as all that.
While it’s true that no one can accurately predict the future of anything (sorry Miss Cleo), there are some things you can do to be prepared and try to guess what’s coming next.
Education Is Key
The secret to guessing about the future of anything business related is to make an educated guess. The key to the future of real estate lies in reading, or in today’s digital world, watching. As a newly licensed agent, or someone still working on their real estate or mortgage loan officer education, you should be absorbing everything you can get your hands on that’s related to real estate. Now the question is, what exactly should you be absorbing?
National news sources are loaded with information on several issues that can be helpful for predicting real estate trends. Stories on things like interest rates, what the Federal Reserve is doing when it comes to lending money, and what politicians are doing that might have an impact on the housing industry.
Statistics on things like new housing starts, the number of homes in foreclosure, and the number of existing homes for sale are all important factors when it comes to real estate trends.
Examples: USA Today, The New York Times, The Washington Post, ABC, CBS, FOX and NBC News, and NPR.
Local outlets contain a wealth of information on things that affect the market. Things like new zoning regulations, for example. These changes can impact specific neighborhoods, sometimes for good, and sometimes not. These sources are also where you’ll find information on things like new housing developments, proposed commercial or industrial construction, and even extended road work that could impact retail rental rates.
Examples: Local news programs and websites, local blogs, newspapers, and city and county government sites.
In addition to general news, keeping up with business publications, both national and local, can offer great insight into possible trends. Tracking indicators like interest rates and the stock market can tell you about consumer confidence levels and what they might be likely to do. Locally, you can also track foreclosures in certain areas as well as median housing prices in different areas. Some of this can be obtained from the news but business-related sources often have a different insight on the statistics.
Examples: Forbes, The Wall Street Journal, Inc., Money, and locally, Crain’s.
Real Estate Websites
Learning from other experts in the real estate field is very beneficial. Agents and brokers that have been in the business for many years and seen it all. They’ve lived to tell the stories of what it was like, and most love to do just that. Many will talk to you directly without much prompting, but you can also find their expertise on blogs and specialized real estate sites. These sites also often have their own statistic-based trend information for local and regional areas.
Examples: Zillow, Realtor.com, and your local MLS.
Remember, no one gets the predictions right all the time. If they could, people would be prepared for market crashes. You can, however, get to know your market inside and out. This will allow you to be prepared to take advantage or protect yourself and your clients for the inevitable market fluctuations.