Analyzing Market Data
The following questions may help you to focus your research, or to frame a research request to your University partners or consultants:
Before you begin your analysis
- Analyzing and synthesizing this data into a coherent picture of your regional and neighborhood markets requires skill. You need team members who:
- Understand housing market economics
- Are familiar with using secondary data (from datasets) and gathering primary data (e.g. through interviews) and understand the limitations of the data with which they are working
- Can work with computer programs including spreadsheets, databases, Geographic Information Systems (GIS), and statistical packages.
- If your organization does not have these skill sets, consider partnering with another organization, a local University, or a consultant. To learn more about partnering, click here.
- Foreclosure typologies:* what kinds of people are being foreclosed on, and for what reasons? Is it:
- Marginal buyers (poor credit, high debt ratios) who maybe shouldn’t have gotten a loan at the time of purchase, and/or were hurt by subprime lending terms?
- Borrowers who bought a costly home that was more than they could afford, perhaps relying on an ARM with a low teaser rate, and who got caught by the combination of increasing interest rates and decreasing property values?
- Buyers who kept refinancing their home – perhaps targeted by predatory lenders – and lost their equity?
- Life event driven foreclosures such as job loss or illness?
- Small investors who over-invested in real estate and got caught in the downturn?
- How is the overall volume of foreclosure activity trending? What are the forecasts of future activity and where is this activity expected?
- How quickly and by whom is foreclosed property being absorbed? Once purchased, is foreclosed property held speculatively without being occupied? How do these trends differ by neighborhood?
*Based on The Foreclosure Typology, © Phyllis Betts 2008
- Where are foreclosures concentrated?
- What are house price, rent and vacancy trends by neighborhood?
- Who is buying homes in the neighborhood (owner occupants? Investor owners? People who invest in improving the property after buying it, or not? No one?)
- What is the level of unsold inventory and how long is it staying on the market? Rental inventory for rent?
- How do these trends correlate with the demographic and economic characteristics of neighborhoods in our region?
- How are different neighborhoods perceived by the people who live there? by potential homebuyers?
- What are the factors that help this neighborhood compete for the investment choices of homebuyers? What are the factors that hurt this neighborhood’s ability to compete for homebuyers?
- What are the housing rehabilitation needs? Do they create a barrier to people purchasing and investing in properties?
Broader Market Context
- What is happening to the fundamental drivers of housing demand in our regional market – population and employment? What is the economic forecast for our region?
- Is our regional housing market overbuilt? What is happening to prices, rents, vacancies, and inventory levels across the region?
- What are the barriers to unlocking demand for homeownership in the broader market? (for example, credit or lending barriers? Lack of employment?) How large a pool of renters are there in our market who could potentially become homebuyers?