Supplementary LectureReal Estate Market Analysis

Market Analysis Defined– A study of real estate market conditions for a

specific type of property

Supplementary LectureReal Estate Market Analysis

Market Analysis– 6 Steps in the Market Analysis Process

• Define the Product (property productivity analysis)• Define the Users of the Product (Market

Delineation)• Forecast Demand Factors• Inventory and Forecast Competitive Supply• Analyze the Interaction of Supply and Demand• Forecast Subject Capture

Supplementary LectureReal Estate Market Analysis

Market vs. Marketability Studies– Market Study

• A macroeconomic analysis that examines the general market conditions of supply, demand, and pricing and the demographics of demand for a specific area or property type.

– Marketability Study• A microeconomic analysis that examines the marketability

of a given property or class of properties, usually focusing on the market segment in which the property is likely to generate demand.

Supplementary LectureReal Estate Market Analysis

Levels of Market Analysis– Inferred

• General and Descriptive

• Uses current and historical general market conditions

– Fundamental• Uses current and historical market conditions

• Uses fundamental analysis to forecast, subject specific supply, demand, absorption, and capture rates over a given holding period