If you want to know if a real estate market is growing, you can look at some key indicators. Although the market can be tricky to predict, there are some conventional and not-so-conventional clues that can indicate how a market is doing. Check out these ideas from the Forbes Real Estate Council on how to tell if a market is growing.
1.Google and Social Media Trends
Google search activity can be an indicator of a growing market. In an age where you can read about anything in a matter of seconds, no one is moving into an area without researching it first. If a certain area is getting a huge increase in searches, chances are good that the market there is growing.
Real estate is closely tied to job growth. When employment is easy to find, more housing is in demand. Job growth also means increased wages for many, which will, in turn, support the growth of the real estate market in that area.
3.Properties are Selling Fast
Are houses flying off the market in this area or are they sitting for months? If they’re going quickly, chances are high that the market is growing. If, as a real estate agent, you have less than 6 months of inventory at a given time, the market is probably growing.
4.Rent Prices are Increasing
Rent prices are another indicator of market growth. When the cost of renting gets too high, many renters will become buyers, or leave altogether. If you can see a steady increase in rent prices, you can bet that home prices are going to follow.
5.Increased Commercial Development
If there’s an increase in new restaurants and shopping centers in an area, the market in that area is probably on the incline. Commercial developers (especially for large companies) do their research, so if businesses are looking to build in a certain market, it’s a good sign that the market is growing or will be growing soon.
Population trends are important to consider when trying to gauge a market’s growth. More people equals more housing, so an increasing population will often lead to a growing real estate market.
7.Higher Volume of Building Permit Applications
You can also use an increase in building permit applications as a metric for growth. More building permit applications mean that more buildings or remodels are coming, which means that the market is likely growing.
As you can see, there are several indicators of a real estate market’s performance. Some ways may be easier to track than others, but the more you can look at, the more you will be able to see the overall market picture.