If you ask most real estate agents how their local market is doing, they’re likely to tell you lots of positives: prices are rising, sales are booming, etc.
That’s at least in part because they’re hoping that you’re going to act quickly if you’re thinking about buying real estate.
Of course, in some cases, they might simply have a healthy enthusiasm and a never-be-negative attitude. But either way, while realtors can provide some good guidance and support, you’ll still want to do a little digging on your own.
So, how should you most accurately evaluate a local real estate market?
There are hundreds of multiple listing service (MLS) systems across the country.
By searching these websites and others for local realtor groups, you can usually find reports that will help you get the information you need, such as annual or monthly statistical reports.
These can reveal things like how much median sales prices have gone up or down over a particular period, whether total sales have increased or decreased, and what pending sales look like now compared to last year.
The National Association of Realtors (NAR) is an excellent resource, producing housing statistics on metro-, regional- and national-market levels. All of its data can be found here at nar.realtor/.
Title companies are also well-worth checking, with data reports filled with detailed information like recent closed sales and sales trends. Keep in mind that on most reports, FSBO (for sale by owner) properties won’t be included.
Assess Purchases and Sales
Do some analyzing to determine if the local market in the area you’re looking at is a seller’s or buyer’s market.
The Days on Market number is a useful tool to analyze the demand and consider the market’s capacity to deliver as well as helping you to figure out the most probable future buying trends.
Check local media like newspapers for articles on real estate that can provide clues into future real estate decline or demand.
Be sure to look into the business section for news about local employers too.
For example, if a company in the area is significantly expanding and adding jobs, that’s a very positive sign for the local real estate market. Or, if a major organization plans to move there, potentially employing a significant number of people, that’s likely to be very good news.
On the other hand, if a large employer is moving, a factory is closing, people are moving away in droves and so on, those are some serious red flags.
Think About Suburbs and Other Places in the Vicinity
The market and price trends in nearby suburbs and the general vicinity are important to look at too.
Find out whether the pace of development and public service amenities in those areas are likely to influence the local real estate market you’re looking at in the future.