1. Market Analysis for Housing
The Subdivision
Wayne Foss, MBA, MAI
Wayne Foss Appraisals, Inc.

2. 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

3. 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)

4. 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.

5. 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

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

7. 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

8. Owner Occupied Housing
An Example
Owner Occupied Housing

9. Step 1: Property Productivity Analysis

10. Market Delineation

11. Market Delineation

12. Market Delineation

13. Market Delineation

14. 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

15. 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

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

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

18. 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

20. So That’s - - - Market Analysis for Housing
Are there any Questions?
Wayne Foss, MBA, MAI, Fullerton, CA USA