Market Analysis for Housing

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Market Analysis for Housing

• The Subdivision

Wayne Foss, DBA, MAI, CRE, FRICS Foss Consulting
Group Email wfoss_at_fossconsult.com
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The Economic Overview

• Essential to proper analysis of highest and best
  use
• Provides data that describes the local economy
• must relate to economic and demographic trends
  that affect the use and value of properties in
  the same category

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Six Step Analysis

• Step 1 Property Productivity Analysis
• Analyze Subject Attributes
• Physical and Legal
• Analyze Locational Attributes
• Land Use Trends
• Linkage and Land Use Patterns
• Growth Trends (rate, type, direction)

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Six Step Analysis

• Step 2 Market Delineation
• identify the geographic market study area
• the area from which data used in the demand
  forecast will come
• analyze consumer profile of most likely users of
  subject-type housing
• housing attributes this type of purchaser
  (renter) desires.

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Six Step Analysis

• Step 3 Forecast Demand
• Analyze current and forecast population
• Calculate Population Change
• Estimate Average household size
• Estimate number of new households in the
  subjects market area for the projection period
• Segment total new demand by housing type
• Segment total new demand by ability to pay
• Estimate total new demand for subject housing

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Six Step Analysis

• Step 4 Inventory and Forecast Competitive
  Supply
• Inventory Existing Supply
• Proposed and permitted supply
• Potential Supply
• Forecast new Competitive Subdivisions
  (apartments)

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Six Step Analysis

• Step 5 Interaction of Demand and Supply
• Residual Demand Analysis
• Subtract total existing supply from total new
  demand
• Divide residual demand by annual, new demand to
  estimate period (time) required for existing
  supply to be absorbed
• Step 6 Capture Analysis
• Estimate subjects capture and absorption
  potential

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An Example
Owner Occupied Housing
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Property Productivity Analysis
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Area Map
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Assessors Parcel Map
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Market Delineation
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Market Delineation
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Market Delineation
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Market Delineation
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Forecast Demand

• Analyze current and forecast population
• Calculate Population Change
• Estimate Average household size
• Estimate number of new households in the
  subjects market area for the projection period

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Forecast Demand, cont

• Segment total new demand by housing type
• Segment total new demand by ability to pay
• Estimate total new demand for subject housing

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Forecast Demand, cont

• Segment total new demand by ability to pay

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Inventory and Forecast Competitive Supply

• Proposed and permitted supply
• Potential Supply
• Forecast new Competitive Subdivisions
  (apartments)

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Interaction of Demand and Supply and Capture
Analysis

• Residual Demand Analysis
• Subtract total existing supply from total new
  demand
• Divide residual demand by annual, new demand to
  estimate period (time) required for existing
  supply to be absorbed
• Estimate subjects capture and absorption
  potential

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So Thats - - - Market Analysis for Housing
Are there any Questions?
Wayne Foss, DBA, MAI, CRE, FRICS, Fullerton, CA
USA Email waynefoss_at_usa.net