Better real estate market analysis for metro areas through the use of unique sources of Internet data

Real Estate Issues, Summer 2002 by Epley, Donald R

The purpose of this paper is to identify specially selected Internet sites that contain unique, useful, and typically free data that can improve the level and quality of real estate market analysis particularly at the metro area. The sites described here have been used for the generation of trade area data at the metro area and for selected comparable markets. They should be scrutinized by all market analysts as each one contains useful data that can certainly add to the ability of the analyst to generate trade reports on individual local markets and further, find comparable data that can be used for competitive regions.

The intent is to strengthen the real estate market analyst's array of analytical tools and sources of data to provide more informed conclusions on overall market trends, and specific site marketability. Another objective is to reduce the analyst's search time as the hourly investment can be significant to search for the appropriate sites and icons and to categorize the type of data and potential use.

All of these sites have been used and examined frequently. Also, they have served as the basis for one university class in real estate market analysis where students are asked to conduct various types of market studies as assignments for typical, market analysis techniques. The result is a student-assembled portfolio of methodology and market analysis that can be used immediately on the first market analysis assignment.1

This site information is organized to answer fourteen typical questions that can arise in the analysis of real estate markets. Every reader who conducts market analysis at any level needs to invest the time to peruse these sites and bookmark and document the information found on each. An effort has been made here to provide a brief description only as each reader will concentrate on the specific data that is of interest to his/her type of analysis once the site is visited.

Also, real estate brokerage sites have been omitted. Those can be visited for a particular assignment if desired.2 The purpose here is to identify unique sources and types of market data that might not be commonly known to the market researcher.

SPECIFIC MARKET ANALYSIS TASKS

The practice of counseling has been described by The Counselors of Real Estate as a process rather than a procedure.3 Reliable sources of Internet data are a necessary prerequisite to timely real estate market analysis and an integral part of the decision-making process.

Real estate market analysis has been explained as the identification and study of demand and supply for a particular (real estate) product.4 It asks three basic questions:

* Will users exist to buy or rent?

* What is the rate of absorption in rent or price terms?

* How can the product be designed or planned to make it more competitive?

The sites below have been selected and used to find specific data that will help in analyzing the demand and supply conditions in a metro market and find answers to the above questions. These resources allow the user to:

a. Estimate the potential demand. Determine the population, employment, and housing characteristics in the trade area. Use data that is similar to allow comparisons among cities for an estimate investment potential. Several of these sites below offer user-friendly data that are very useful and, in one site, detailed to the census tract level.

b. Compare cities and regions with comparable data for the U.S. The task may be to develop comparisons of selected indicators among regions that are also comparable to the same indicator for the U.S. Several of these sites contain comparable figures.

c. Find data that is hard-to-locate and unique such as a quality-of-life indicator. A quality-of-life indicator that can be used for comparisons among regions is found on one site for a number of metro areas. Another example would be construction costs that have been aggregated for use in one area, and can be used for cost comparisons in competing areas. Another site contains this information.

d. Find population projections for the metro market that are comparable to projections in competitive areas. A population projection for the metro area is needed frequently for the calculation of a gap that may exist between the current and future level of demand and projected supply for a specific real estate product. Reliable projections are not plentiful, and further, not always comparable to projections for competing metro areas.

SOCIO-ECONOMIC DATA

Where do I find personal income by county that can be compared to the U.S. on the same site? Will the site allow the user to calculate percent changes between selected years?

A little known site with very useful and valuable socioeconomic data for the five Northwestern states and the U.S. is maintained by the Agricultural Economics Department at Washington State University (http://niip.wsu.edu/). It contains a significant amount of census information that has been selected and loaded in a user-friendly manner. Additionally, the site contains a summary of selected economic indicators that are updated periodically. It is a good source of comparable U.S. data that has been designed for convenient use. The author is a professor of agriculture economics and maintains the information as part of his university assignment.