Old as the saying is, location, location, location still rings true when identifying the best places to buy a home. Those in the real estate and home building profession have identified the underpinnings of all kinds of real estate markets and use the information to make educated decisions about where, what and when to invest.
Most of the data the experts and analysts use is available online. Some is private and much is public. While it takes some time to identify the resources, it’s well worth doing, since these data provide the tools to construct a snapshot of present and future market conditions.
With a few exceptions, local employment and employers dominate housing market conditions. Housing market economists and analysts know that the distance to and quality of local employment centers affects the local housing stock, its prices and characteristics.
Anyone who wants to identify where the jobs are and will be going can use the internet to find who the local employers are by searching on a city basis for “top local employers.” Chambers of commerce, development agencies, or even the jurisdiction itself typically list their top employers, total employees and their specific locations. Local planning agencies may usually know where new commercial buildings are being planned for development that can signal new employment corridors.
The Bureau of Labor Statistics (BLS.gov) reports local employment trends for the U.S., and provides historical data for comparison. Local newspapers and online sites also list where new employers are coming and who they’re likely to hire. Areas that see job growth are much more likely to have stronger housing markets, especially those involved in manufacturing activities, health care, and professional services. Places where jobs are in decline aren’t likely to see aggressive growth in housing values.
School districts are another aspect of identifying attractive neighborhoods. Places with better districts tend to be more in demand from families with children. Notable exceptions include thriving urban cores that attract young, affluent residents.
It’s never been easier to find home value trends than it is today. The websites Zillow.com, Realtor.com, and Realtor.org (National Association of Realtors) provide extensive data on local markets and their activity. Private real estate brokerages often utilize big data business intelligence to aggregate local and national data to provide projections for larger metro areas across the U.S.
Their reports and special publications are helpful when identifying macroeconomic conditions regarding metro- and statewide market conditions. Many of these companies provide free subscriptions or online reports for the public.
At the individual level, the resale data that Realtor.org provides valuable data like the time on market for existing homes for sale, the prices asked, and the number for sale. Rising prices and short time on market indicate a strong market.
Prospective home buyers can use Zillow.com to find historical pricing trends for existing homes. Although it’s hard, if not impossible, to find what the drivers for the price increases were attributable to property improvements or simply appreciation.
Anyone who is serious about buying a home will find that local real estate agents are a good source of information about the local housing stock and pricing trends. They have access to much more data than the public and will share their insights with their clients.
Although it takes time and effort to dig into the local conditions that drive the housing market, it does payoff in making solid, informed decisions about when and where to buy and how much to pay. While it does take legwork and thought to identify the best options based on individual needs, the knowledge provides clarity and promotes solid decision-making about purchasing a home.