Topic 15.3: Market Indicators

Learning Objective

After successfully completing this topic, you will be able to demonstrate understanding of the different market indicators.

Vacancy Rates

The vacancy rate in an area is a good indicator of market activity. If the vacancy rates are high, it  indicates an oversupply of houses or apartments. Rents and market values tend to decrease.

Price to sales information

An appraiser will collect information on prices and sales in an area to forecast trends in the market. Fewer sales than last year may indicate a slowing market. Lower prices are also an indication of problems in the market. 

Building permits

To estimate the supply of houses or apartments, appraisers will consider not only the units currently on the market but must also consider those properties that will be on the market soon. That data comes from the public records in the form of building permits.