One of the most important things to consider when buying a new home is the local housing market. Having an in-depth knowledge of the local market can help you better understand sales trends, reasonable prices, and what the market will look like in the future. It can also help you better understand the community and the advantages and disadvantages of different neighborhoods. All of this information is useful in making informed decisions about purchasing a new home. Here are a few tips for studying your local housing market in order to make smart buying decisions.

1. Look at Historical Data

The best way to understand which direction the market is going is to first look at where it’s been. Review online real estate reports from sites like Zillow or the National Association of Realtors ro get an idea of what has been selling and for how much. You can get a better understanding of which neighborhoods are selling the best and which areas are seeing the highest sales prices so you can identify the most valuable areas.

2. Obtain Property Value Estimates

When you are searching for a home, you may be wondering which neighborhoods are the most valuable. You may also want to know what a reasonable offer might be on a home. To gather this information, you should start by looking at homes that have recently sold and calculating the average sale price per square foot for homes in the area.

3. Look at Employment

Employment is one of the most important factors in determining the local housing market. In places where employment has rapidly increased, you will also notice that the real estate market in the area is also booming. On the other hand, in areas that have suffered massive layoffs, you might notice a decline in the housing market. Research your local employment rates and pay attention to the number of people moving in or out of the area, because employment plays a major role in the local real estate market.

4. Consider the Supply

Pay attention to the number of new homes that are going up on the market. If there is a major shortage in the amount of housing available, you will notice that prices will begin to go up. On the flip side, if there is a surplus, you might begin to notice prices dropping.

5. Study Current Market Trends

Your local MLS is a great resource for studying current trends and statistics. Here you can gather data about the number of homes that have gone up for sale, how many have sold, at what price they are selling, and how great the demand is at that time. This information can help you better understand what is happening at the moment as well as predicting what might happen in the near future.

6. Walk or Drive Through Communities

Finally, one of the best ways to get an idea of the neighborhoods in your local real estate market is to get out there and tour them. Drive through new developments and older neighborhoods and take a look at how many homes are up for sale. Learn about the amenities of each neighborhood and what they have to offer and where they are located in proximity to major employers. This will help you gather firsthand information about your local community.