When you’re a real estate agent that wants to specialize in a local market, such as Dallas or Austin, you have to know your local market. People will turn to you as a local expert in the real estate market.
There are many ways to get to know your local market as a real estate agent. Let’s look at some of the things you can do to stay on top of the local real estate market in your area.
Top 7 Ways to Get to Know Your Local Real Estate Market
1. Get to Know Community Leaders
A great way to get to know your local community and real estate market is to get to know the local community leaders. Introducing yourself through email or in-person is a great way to start. You can also join the local chamber of commerce to get to know the leaders in the community.
2. Study the Numbers
Every local real estate market has numbers you should know. You should know the inventory numbers, how long properties are staying on the market, the average sales price, and a few other numbers. Always study the numbers for your specific real estate market.
It’s common for clients, friends, and family to ask about the numbers. They might have read an article or seen a report on the market. You are supposed to be the expert, so you should know the numbers inside and out for your local market.
3. Know the Economic Principles
There are ten specific economic principles you should understand if you want to better know your local real estate market. The economic principles you want to know include:
- Anticipation – This principle looks at the value of real estate based on future advantages and profitability.
- Balance – When land, capital, labor, and coordination, known as the production agents, are in balance, a property can attain the maximum value in the local market.
- Change – The value of a property will be influenced by the change inside and outside the local market.
- Competition – One of the main reasons someone will pay above the listing price is competition for the property. This can have a big impact on the local market.
- Conformity – As property values go up, properties that are similar will also go up in value.
- Contribution – The features of a property in the local market only matter if they help increase the value.
- Externalities – External conditions can certainly have an impact on the local real estate market. These often include political, economic, social, and environmental factors.
- Highest and Best Use – When using a parcel of land for the best net income when capitalized is known as the highest and best use.
- Substitution – The value of a home cannot be any higher than the sale price of homes with similar utility and features.
- Supply and Demand – When supply is low and demand is high, it causes home prices to be higher. However, when supply is high and demand is low, home prices are lower.
If you understand these economic principles, you will have a good base for knowing your local real estate market.
4. Pay Attention to Local Businesses and Organizations
You can learn a lot about what will happen to your local real estate market by paying close attention to local businesses and organizations. When big things happen with key local employers, it can signal whether the economy is strong or weak in your area. Banks and credit unions can clue you into things going on with mortgages, too.
It’s also smart to pay close attention to all of the following:
- Builder associations
- Local building department
- Business review journals
- Chamber of Commerce
- County office
- Title companies
- Utility companies
- Mortgage brokers
- Visitor’s bureau
These organizations and businesses can help you see what’s coming and what to expect with the local real estate market.
5. Keep Up Online
There are so many sources online you can use to know the national real estate market and your local market. Paying attention to any real estate news sites can help you stay up-to-date on what’s going on in your local market.
You should have a few good sources you pay attention to regularly. It can even be helpful to subscribe to some local news sources that talk about the economy and real estate in your market.
6. Study Your Local Real Estate Market Cycles
You want to know your local real estate market cycles, too. Some markets tend to be a few months behind the national market or the larger markets nearby. When you know the local real estate market cycles, you will have a glimpse into what to expect.
Make sure you understand how the cycles impact vacancy rates, capitalization rates, selling prices, and rent prices. Knowing these factors and your local market cycle can help you advise your clients better.
7. Pay Attention to the Real Estate Listings
You have your own real estate listings, but you should be paying attention to other real estate listings in the area, too. Are properties starting to be discounted? Is it taking longer to sell a home than a few months ago?
When you start to see home listings change, you will have a better idea of what to expect in the local real estate market. This is one of the best ways to get a sense of how your market is changing.
If you want to specialize in a local real estate market, you need to know that market inside and out. Use these seven tips to better know your local market. There are many things you can do to become an expert in your market and this is just a start.