MARKET ANALYSIS


Market orientation
Market orientation means the agent positioning him/herself in the market segment that is most profitable to the seller. This requires a market analysis.

Market Analysis


The professional agent starts by drawing together facts, statistics and information that indicate market trends. This will reveal challenges for the agent and opportunities that he/she can take advantage of. The real estate maxim is; “work the market you are given”.

If interest rates are high and farm affordability low then the agent can concentrate on alternative financing methods including seller finance. If the property is slow to sell even with genuine buyers, encourage the seller to reduce the price and at the same time, extend your search for more buyers (eg Sydney and interstate markets). Do not be afraid to ask sellers to reduce asking prices if their property is obviously overpriced. This is an important and essential part of agency practice as you have a duty to advise the seller of a correct selling price and you do not want to waste time on trying to sell an overpriced property.
The key to a successful real estate career is to recognize changes in market conditions as trends and to adjust your business to take advantage of the trends” (p17)Real Estate Agents Business Planning Guide.

After you assess area conditions narrow you scope to your own market. Use the table below to gather your statistics:


MARKET ANALYSIS


THIS YEAR LAST YEAR
OVERALL

Total # of properties available (listed)

Total # of properties sold

NEW

Number of properties available (listed)

Number of properties sold

RESALE

Number of properties available (listed)

Number of properties sold




BY PRICE RANGE

000-20000

200001-400000

400001-500000

500001-900000

900000+



Analysing this simple table can reveal a great deal about your market: With this information you may discover for example, that the greatest rate of growth is in small properties. This could be an indicator of a growing demand for hobby farms near an expanding town or city. If this is the case, then you can concentrate on this niche market.
If new properties are much higher than resales, what does this mean? It would tend show that the agricultural base is established and new buyers may be moving into the area because of a growing reputation og good agricultural land. Resales would tend to indicate the reverse.

The table will also show whether or not there is currently a sellers' or buyers' market.

This kind of simple analysis will help the agent to determine his/her market domain.
You can use the same table to track your agency business in particular price ranges. By gathering such information and assessing trends yearly you can target the price ranges of opportunity. Further, this information can be used in your sale presentations as it will show that you are a most able and professional agent who is prepared to carry out market research.

Presentation is aided by graphing the results using a spreadsheet program.


Competitors


Having discovered your market domain it is useful to analyse your competitors. When assessing your competitors remember that “their evolution affects your position in the market place”. Recognizing this and building plans to lead is most important for a successful agency.

Who will compete against you in your market domain? Do you have sellers trying to sell their own farms? Both are your competition and may be a significant part of the competition for your commissions. Good agents assess the strengths and weaknesses of their competitors and plan opportunities proactively. Without good market research many agents make moves that are only reactions to competitors' moves.
The following table can be used to analyse the competition:


BEST COMPANY COMPETITORS
s=strengths w=weaknesses COMPANY


A

B

C

s

w

s

w

s

w

Overall marketing strategy







Competition for listings







Competition for buyers







Inage/reputation







Quality of associates







Overall competitive position









The same table can be used for best agent competitors.
Your success depends on the building of a marketing strategy that exploits the weaknesses of your competitors. If your competitor is a large firm their weakness (as often perceived) is that they cannot offer personal service. Rather than compete against such firms it is better to compete against “boutique” agents. That is, very profitable agents who have found a niche real estate market. Your real competitors are the agents who have the market domain that you wish to take or expand in.

Statistics


In a country town there are usually two sources of reliable information:
  1. Your local council should have compiled demographic statistics used for their own needs and the promotion of the district. The council will also have a list of the latest sales which will show you the areas where there is the greatest sales activity and prices.
  2. The local tourist body (often run by council) shoul also be a good source of statistics.
The local library will have or at least have access to more important and general statistical information through demographic and other statistical data published by the ABS. This information is good for analysing regionjal trends. The professional agent can use all this data to determine his/her market domain. What demographic data should the agent be looking for?. See advice on market trends