Top-earning real estate agents have spent a lot of time getting to know their local market.
We’re sure you know this already because this is often the first piece of advice a beginning real estate agent receives from experienced Realtors.
Real estate is one of those industries where people’s buying and selling decisions are nuanced. The demand for and price of a property is heavily influenced by local political, economic, sociological, and environmental forces.
But how do you do it? How do you get to know your local market – when there’s so much to know?
After all, a real estate agent has to understand the following:
- the personality of different neighborhoods
- the factors, forces, and principles that shape the area’s economy
- where to obtain marketplace data to ensure you have the most current information at your fingertips
Yes, that’s a lot to learn. But we’re here to help.
First, we will look at a broad overview of economic principles that may affect a person’s buying and selling decisions.
Then, we will focus on the real estate industry – and the key factors you need to understand about your local market to help your clients make decisions.
Finally, we will give you specific advice on how to become your local market’s expert.
A Broad View of Factors That Affect Real Estate Sales
Here are a few factors you need to be aware of as you get to know your local real estate market.
Anticipation: A property’s value is partly based on its future profitability and advantages.
Change: Value is influenced by variations inside and outside the market.
Competition: A property’s worth is impacted by competition.
Externalities: The value of real estate is affected by external conditions such as the four value forces—economic, social, political, and environmental.
Substitution: A property’s value cannot exceed the sale price of those with similar features and utility.
Supply and demand: When supply is high, and demand is low, the price of real estate is low; conversely, when supply is low, and demand is high, the price is high.
What You Need to Know About Your Local Real Estate Market
Now that you have an overview of the factors that affect the overall real estate industry, let’s dig in and discuss what data you need to collect about your local market.
- Listing and sales data — such as average volume sold, property prices, and appreciation rates
- Features of listed and recently sold properties
- Financing data
- Demographics (population data)
- Other economic, social, political, and environmental data as it impacts your unique area
How To Learn More About Your Local Real Estate Market
As you can see, it’s not enough that you know about neighborhood schools and the features of each neighborhood – even though having that information is essential. You also need to know complex data and knowledge of the inner workings of the community. Here’s how to get the information you need.
Start by using the resources your broker, MLS, and your local professional real estate organization provide. You can also turn to these sources for additional data or to fill in any gaps:
- Banks and credit unions
- Builder associations
- Key local employers
- Bureau of Labor Statistics
- Local building department
- Business review journals
- Mortgage brokers and bankers
- Census Bureau
- Municipal planning commission
- Chamber of Commerce
- School district
- County office
- Tax appraiser’s office
- Data service organizations
- Title companies
- Electric company
- Water company
- Visitor’s bureau
Here are some additional tips for getting to know your area.
Explore the area from the perspective of a resident.
Do you live in the area where you serve as a real estate agent? This would give you the best understanding of the community and would give you credibility in the eyes of your clients.
Get to know area business owners.
Local business owners are invested in the community. Visit locally owned establishments and start discussions. It’s from these individuals that you will learn about changes that are occurring within the community.
Establish a network of professionals related to your industry.
Get to know local contractors and builders. Make relationships with inspectors, plumbers, roofers, and electricians. Learn what moving companies offer the best pricing and service – and a list of house cleaners who can help clients in a pinch.
Subscribe to area news sources.
Read the local newspapers and magazines regularly. Subscribe to newsletters and read local bloggers. Attend local government meetings and other community discussions. Follow local politicians on social media.
Final Thoughts
Real estate is a relationship-focused industry. You can’t be a local expert AND an introvert.
For more tips on understanding your local real estate market, check out the resources offered by Colibri Real Estate’s Career Hub.
Colibri Real Estate (formerly Real Estate Express) offers state-specific real estate training and continuing education courses. And when you are ready to upgrade your license and become a broker, we can also help you with that.
We are real estate experts and can’t wait to share our knowledge with you.
