Successful real estate investors know their local market. The trends and
values of the local market can make all the difference between choosing a good
deal and a bad deal. But how do you know what your local market is like? Unless
you’re heavy into real estate investing, or you have plenty of real estate savvy
and a good handle on the local market, you probably have no idea how to figure
out what the local market is doing. Here’s one way to quickly assess what’s
happening in your local real estate market.
County records.
Taking a quick look at your local market in many areas will likely be as near
as your county assessor’s office. In the state’s where property tax assessment
has been a big issue, the county tax assessor has probably put some incredible
effort into making assessed values reflect the real market values. That means
that your county assessment records will be a true indication of local real
estate market trends.
But how do you gain access to those records? You simply walk in and ask. If
you want, you can explain your mission. But for the most part, all government
records of this type are public records. That means anyone can have access to
these records. Appraisers and real estate agents use them to conduct their own
research into local market analysis, as well as to gain information about a
particular piece of property and to look at local real estate market trends.
How do you use these records to evaluate local market trends? It’s actually
pretty easy to get a basic understanding by checking just a few pieces of
property that have sold at least a couple of times over the past few years. If a
house sold for $100,000 in 2000, then sold again for the same amount in 2004,
you can infer several bits of information about the local market in that area.
The local market value is holding steady or rising slightly, and there’s a
demand for property in that area are among the trends you can gather, but only
if you can support that with the sale of other properties in that local market.
Evaluating the local market isn’t as easy as that, but it is a good first
step, if you keep some rules in mind. Not all sales will reflect the market. Pay
attention to the buyers and sellers. If a huge corporation purchased property
adjacent to property the company already owned, it may not be reflective of the
current market value. Owners may have been overly willing to sell because of the
proximity, or the company may have been overly anxious to buy for the same
reason. Either will skew the amount paid.
Family transactions also may reflect something other than current market
trends. When a grandchild buys out the other heirs for property, a falsely high
or low price may be indicated.
Using a little common sense, courthouse records may very well be the least
expensive and most easily attained records you can find to get a basic grasp of
local market trends.
