Market Stats Snapshot: How to Interpret Current Real Estate Data and Who To Read

As a buyer and seller in the real estate market, it is always wise to do some research. Gone are the days when people used to buy or sell properties with little consideration for comparative analysis or monitoring market trends. Using real estate data for analysis helps lower potential risks involved in selling and purchasing a property. They give you a good idea of what's happening in the real estate market, like the average price of homes for sale/rent, the number of homes available for sale/rent, homes sold or rented in the past and months of inventory. But, consulting with different data sources and ensuring the correct information can be hard. So, let's discover the art of interpreting the real estate data fetched from the most reliable sources.

Key Indicators To Consider When Interpreting The Real Estate Data

There are several key indicators that you should consider before interpreting the real estate data. They are:

Average Prices

Average property prices are calculated by adding the total sales price for properties in a specific area divided by the total number of properties sold. The average property prices in a specific area can help you analyse the market's direction. A price rise indicates a seller's market, while declining prices may suggest a buyer's market.
 

Days on Market

The number of days a property stays on the market is a crucial indicator of market activity. A shorter average time on the market means the demand is high, while a longer time on the market means the market is slow and there aren't many buyers.
 

Inventory Levels

Inventory levels are calculated by dividing the total number of homes in a specific market by the total number of homes sold in the same market. Low inventory levels lead to increased competition among buyers, which increases prices and vice versa.
 

Mortgage Rates

Fluctuations in mortgage rates impact the real estate market. Lower rates are ideal for buyers because they motivate them to take out loans to buy a property, leading to increased demand and higher prices.
 

Reliable Sources For Real Estate Market Data

Reliable sources provide data that is collected through thorough research. So, the information is accurate and up-to-date. Consider the following sources for evaluating real estate market data.
 

Government Agencies

Government agencies collect and publish local, regional, and national real estate market data. Dubai Land Department (DLD) is a reputable source for market data consulting.

Real Estate Research Firms

Real estate research firms, such as Property Monitor, produce full quantitative assessments. These firms staff data scientists and analysts who use advanced methodologies that ensure accuracy.
 

Real Estate Websites

Websites like Betterhomes provide access to market data, property listings, historical sales data, and market trends. These websites have user-friendly interfaces that allow you to customise your search parameters.

How to Effectively Interpret Real Estate Data

Interpreting the real estate market data is about gaining deep insights, identifying market trends, and making decisions based on that data. However, an organised approach is required to get useful information. Here are the essential steps to interpret real estate market data effectively:

1. Ask yourself the purpose behind analysing the data and what useful information you want to get from the data.
2. Collect real estate market data from reliable and credible sources mentioned above.
3. Check that the data is error-free and arrange it clearly so it is easier to understand and study.
4. Get to know the different variables in the dataset and determine what each variable means, such as property type, location, size, and how long it's been on sale.
5. Analyse the market trends in real estate by monitoring property prices in different locations, sales volumes, and market activity over time.
6. Compare the historical data with the current data from a similar neighbourhood to better understand the market and how the neighbourhood performs relative to others.
7. Consider the economic conditions, interest rates, population growth, and local development plans and how they affect the market trends.
8. Analyse the relationship between property price and the property size, location and amenities.
9. Conclude your analysis and make your decision based on information gained from the data.
    

The more information you gather will reduce the amount of risk. Accurate information allows one to interpret clear and simple data and helps understand the right investment. For example, let's consider buying an apartment. What are the facilities within the building? What is the apartment's size, and how much are the apartments of the same size worth in the neighbourhood? What is the property's current price, and what could it be worth in the future? What are the amenities nearby? Recently, there has been a new trend of accounting for non-traditional variables like online reviews, access to supermarkets, and even how busy the building's elevator is. All this data helps shortlist properties that better suit your needs and those worth skipping.

Conclusion

Never ignore the importance of real estate data when selling, buying, letting, or renting a property. With accurate information, one can easily assess the market, make smart choices, and achieve the best possible results. In addition, we suggest that you seek help from the real estate agent, as the interpretation of the data implies familiarity with the market conditions, and the real estate agent is the person to offer details on the matter.

Contact one of our real estate agents today to get support throughout the process!