How local are real estate markets? Basically, how similar is a market in one neighborhood versus a city in general versus nationally, etc.? If the national real estate market is a hot sellerr's market, how likely would it be, for example, that the Philadelphia market would be similar, or a neighborhood within Philly? This is just an example, but you can get the point.
Although having national statistics is OK and learning what the expected trends may help overall. Each market is different. The price points can change from one block to the next, the zoning laws are particular to to area, the crime stats and school districts differ,... . You should understand the particular market you are looking to invest in. Based on feedback from some of my investor friends, Philly is a great market with allot of potential.
Good luck. If you have any specific questions, feel free to reach out.
@Ben Feder it is really important to understand the micro market that you invest in because of course it is going to be different than the national trends and averages being talked about in the media. What happened during this last period in Cities like NY and San Francisco is totally different than what happened in Philadelphia. And within Philadelphia, what happens in University City is very different than what happens in E Germantown or Tacony . . . not to mention the surrounding suburbs in Montco, Bucks etc. City planning, development happening on a specific block, a new ordinance in a zip code, the sudden decision to eliminate STR -- so many factors come into play and you need to understand quite a bit about a market in order to make truly informed decisions (or rely on someone else who has already done the analysis and can tell you what fits your strategy/goals.
@Sheryl Sitman great reply
@Ben Feder The question if a local market will follow the national trends is entirely dependent on the local market you're interested in.
National data can be useful for informational purposes (price, rent, inflation, days on market, etc.), but your local market can be drastically different. I wouldn't rely on national data to make decisions in your market.
National data has the benefit of diversification. Local markets can be highly dependent on a few critical employers.
You also have micro markets within your local market as others have already pointed out. Trends can vary drastically by neighborhood and even by block.
@Slawek Jakubowski tnx!!
@Sheryl Sitman nailed this as it pertains to Philly and many other cities. Sure, national trends matter, but Philadelphia in particular is one of the most block by block investment areas I've ever seen. If you use city-data you can see the income trends differ by $40k in household income in two blocks. Cities have sweeping gentrification, but to invest wisely there you need to know the areas that are resisting gentrification. Philly is a great example of a place where two investors can buy similar properties for similar prices around the corner from each other and one can BRRRR or flip and the other can lose big time trying to do the same.
@Ben Feder I think it just depends on your location. Mine is fairly “local” for a 30 mile radius despite there being about 8 different towns.
There are some differences in zoning laws but the methods of finding out about the zoning is the same in each, the methods of going before the planning, zoning, and select boards is the same. You call the secretary, set the appointment and attend the appropriate session.
Mostly the realtors are the same. The same big real estate companies service all the towns and then there are some smaller players.
There are some variations in price, and some areas are more expensive, you can either drive around and find this for yourself, it’s a small enough region you’re able to do this, or hook up with a realtor and tell them what you’re looking for.
@Ben Feder The Philadelphia market is one of wonders when considering neighborhoods vs the city in general. Just like @Sheryl Sitman says the city is extremely block by block, you can see ARV values change by 20/30k in the same neighborhood simply depending on the block you're on. Philly has many micro neighborhood within bigger zip codes and even neighborhoods within specific blocks.