How do I measure the Real Estate Market?

4 Replies

Hey BP Nation,

I am new to the Real Estate world. 

How I measure whether it's a great time to buy or sell in the real estate world?

Are there any stocks that govern the real estate world?

Hey @Luis Valdez ,

The real estate market (like any other market) has its ups and downs. There are always ways to make money when things are going great as well as other strategies to implement when the market is not so great.

As for measuring, real estate is both an art and science. If you're looking to own rentals, you buy when a specific deal meets your investing criteria (e.g. cashflow, appreciation potential, number of units,...)

If you're looking to make money wholesaling or flipping, you buy/sell when you find a specific deal that meets your profit margin requirements.

In both cases, don't base your action decisions on whether the market is hot or cold, but rather on the structure of 1 deal. If it doesn't meet what you need, go find a different deal.

@Luis Valdez

@Nathan Platter is correct.  However there are tools that can assist you in evaluating a market.  There is almost always a market that it is a good time to buy it's just knowing the correct market.  

https://www.yardimatrix.com puts out some good reports on markets that can help determine overall interest. Once you have determined that you can look at a more detailed local report for that specific market from Marcus & Millichap. You may also be interested in reviewing reports put out by CBRE that can inform you about market CAP rates. You can subscribe to the reports they put out and get them sent to your email or just login to the site and pull them up, they are free.

@Luis Valdez There are a tons of resources: annual statements of REITs (good and bad), broker research reports, personal research, reports by vendors like Yardi, Axiometrics, REIS, etc. 

But this is an art more than science. If it was a science then we would all have the ability to avoid bad things happening to our portfolio.

Best bet: Develop your investing criteria, goals and objects and then concentrate on 1-2 markets.

Wrote a helpful blog post on how to select a market: Choosing the Right US Real Estate Market To Invest In: The 4-Step Guide to Success

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