Market Analysis for Housing The Subdivision Wayne Foss, MBA, MAI Wayne Foss Appraisals, Inc. Email: wfoss@fossconsult.com

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

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)

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.

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 subject’s 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

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

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 subject’s capture and absorption potential

Owner Occupied Housing An Example Owner Occupied Housing

Step 1: Property Productivity Analysis

Market Delineation

Market Delineation

Market Delineation

Market Delineation

Forecast Demand Analyze current and forecast population Calculate Population Change Estimate Average household size Estimate number of new households in the subject’s market area for the projection period

Forecast Demand, con’t Segment total new demand by housing type Segment total new demand by ability to pay Estimate total new demand for subject housing

Forecast Demand, con’t Segment total new demand by ability to pay

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

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 subject’s capture and absorption potential

So That’s - - - Market Analysis for Housing Are there any Questions? Wayne Foss, MBA, MAI, Fullerton, CA USA Email: waynefoss@usa.net