You may have heard the old saying, "numbers do not lie," and this is one idea that you can take to the bank. Interestingly, there seems to be a common quality among self-made wealthy individuals. They have a good sense of numbers. As any savvy real estate investor will tell you, they are avid followers of real estate market reports.
Yet, in my line of work, I have met many people saying they rely on their intuition or gut feelings. Somehow they have this mystical knowledge to understand and predict the market. There is no surprise that I have never met a successful real estate expert who claims they go with their gut feelings.
The benefits of understanding market report
I am not saying you should be a statistician or a master in reading every sort of real estate market. However, having a basic understanding of market trends will guide you in several ways. For one, you do not need to rely entirely on others' opinions. As I mentioned, "numbers do not lie," but people do lie. Second, you can judge if individuals skew the market report's interpretation for personal gain. To borrow from Warren Buffet, "do not ask the barber if you need a haircut" Third, you may NOT depend on others to follow the market regularly; rather, you can consult with an expert to confirm your understanding.
What is a market report?
Now that I got your attention, let's look at the question; what is a market report? A market report is a written report that investigates the changes in a market. Several statistical tools and analyses are employed to make sense of the data available. Some statistical tools are simple, and others are complex, requiring experts to perform the analysis. However, lucky for you and me, recent developments in software have made it easy and accessible.
A market report comprises data, charts, illustrations, and written descriptions explaining the changes in a market. Some of the data analyzed are demand, supply, price fluctuations, market tendency, price index. Keep in mind that the market report is an information tool for businesses and consumers to make intelligent decisions. The real estate market report is no different from other consumer market reports concerning products such as homes, apartments, offices. A real estate market report can focus on a small community like Willowdale or a broad look into a metropolitan like Toronto. Banks, insurance companies, and government may consider market reports encompassing the nation.
Regardless of the scale of data, market reports are similar in structure, and they all follow specific criteria. Characteristics of Market Report and what makes it valuable. You should expect specific parts in every market report. The consistency and expected standards within a market report make it an excellent tool for professionals. Here is the list of market report characteristics outlined below:
A written report: Market reports are in written format, with data illustrations, charts and descriptions.
A Specific product focus: a market report contains only the transactions of a particular product—for example, you may have seen condominium, residential, office space reports and so forth.
A specific market focus: A market report is commonly prepared for a distinct market. You may find the market report for a community, city, or province—for example, a condominium market report for central Toronto.
Particular Time: A market reports are for a specific period. For example, market reports can be monthly, quarterly, and yearly.
Definite structure: A market report carry a definite form. Hence, this enhances the efficiency and recognition of the information.
Market-related information: A market report comprises solely business information related to the product and the market of interest, and it does not include any personal data.
Market outlook: Some market reports may also include an outlook based on the past market trend. The market report must present unbiased future market trends based on data from past and present market conditions.
On a cautionary note, real estate market reports can be reasonably accurate in forecasting short-term market events, for example, three months. However, long-term prediction of the market is a beast of its own. Many factors influence the real estate market, for example, interest rate, the flux of foreign money, immigration policies. The changes in these factors and the type of influence they may have on real estate are impossible to anticipate hence forecast. It would help if you learned to block out any of these so-called experts that try to tell you what will happen in six months or more.
Taking an impersonal position: The market report must be limited to the professional market data and statistical analysis without referring to any individual or corporation directly or indirectly.
Many savvy real estate agents, real estate professionals and investors rely on the statistical information contained in the real estate market report. Real estate agents can utilize the data (1) to help them price the property at the market value, (2) help the clients to choose a particular market (3) timing of selling or buying a property. Professional real estate investors are not shy to say they will not decide on any property until they fully understand the market condition based on the market reports. It is a bit of great advice we all need to take in. You should also familiarize yourself with the market report and consult with your trusted real estate agent before making real estate decisions.
The above Real Estate article was provided by David Khosravi, a leader in his field in North York, Willowdale Real Estate, Reach out to David via email: firstname.lastname@example.org or by phone: 416.990.2424