How Experts Assess Credibility of Market Analysis

?? Friends, in the world of real estate, understanding the nuances of markets isn't just a nice-to-have; it's an absolute necessity called market analysis. ??

Market analysis is the process that can make or break property selection and valuation.

But how can YOU tell if a market analysis report lacks the depth and insight it should have to achieve a credible conclusion or informed investment? ??

Let me share some expert insights: ??

?? Firstly, if the report relies on a limited or outdated dataset, you might want to take a closer look.

Comprehensive market analysis should pull data from various sources, including recent sales, listings, economic indicators, and demographic information.

It's like trying to see the big picture ??? with only a small piece of the puzzle ??.

Imagine being blindfolded and being asked to touch the ear of an elephant ?? to determine what type of animal you were in contact with; would you know it was an elephant or rhinoceros?

Then there's the issue of superficial research.

Superficial research you ask?

Yes, superficial research. ??

If it seems like the market analysis report barely scratched the surface, the conclusion might be missing out on crucial information that has influence over the analysis conducted.

Proper market analysis requires in-depth research and data collection, not just a cursory mention. ??

Recently, there has been a trend towards stating sweeping maxims, the kind that are so broad they can hardly be dismissed, but then again they are so broad that they do not apply to the specifics of the particular analysis undertaken.

?? A good market analysis should also dive into market trends.

You see, understanding what's been happening in the market over time and where it's headed is vital.

If the report doesn't address historical trends or doesn't offer a forward-looking perspective, it might not be giving you the full story. ??

We have all seen this approach where an analyst selects an extended period of time that accurately states the mean or average of the data set, yet it completely understates the recent activity trending sharply higher.

The result is a complete misrepresentation of recent and present conditions which result in a conclusion that is actually not supported.

Guess what?

?? Demographics matter, too.

A thorough analysis should consider the demographics of the area, like population growth, age distribution, income levels, and employment trends.

Ignoring these factors can leave you to bypass an investment opportunity or improving market due to lack of sufficient inquiry and analysis. ??

Neal Bawa of Multifamily U. is a great example of a professional who refuses to buy into broad narratives and instead focuses on nuances that influences informed investment decisions.

You owe yourself the investment in your education, take his free course on Udemy and experience the value of thoughtful and thorough market analysis.

So, my friends, in a nutshell, if a market analysis report lacks the depth and insight you need, you might notice signs like limited data, superficial research, neglect of market trends, incomplete demographic analysis, then these first four expert insights in our series on market analysis are a starting point to provide perspective for you to assess the quality of a research report or an appraisal report’s reliance upon market analysis.

Or as Gary Peterson says: Better Research, Better Results ??

Onward and Upward! ????

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