How to conduct a real estate market study: a practical step-by-step guide

Why conduct a real estate market study?

Understanding the market is the starting point of every successful listing and sale. To do so, you must know how to interpret data and turn it into concrete business decisions.

• Importance of market analysis in the real estate sector: knowing what product sells, at what price, in how much time, and to what type of buyer allows you to build strong arguments, capture properties more effectively, and establish trust with clients.

• Supply, demand, and market evolution: as an agent, it’s essential to analyze what types of properties are available, how many active buyers there are, and what emerging trends are appearing in the area. Changes in the economy, demographics, or new infrastructure can quickly alter this balance.

• The role of the real estate agent in valuation and acquisition: a well-trained agent can turn data into value for their clients. At Engel & Völkers, our advisors learn to use market studies as a tool for acquisition, positioning, and argumentation during valuation visits.

Property evaluation for the market study

The key is to know the product in depth. Every property is unique, and its valuation depends on multiple factors that must be analyzed with precision. These are the points to consider:

Physical and structural characteristics

The first step in the evaluation focuses on the property’s physical qualities. These aspects directly influence its appeal and price:

• Number of bedrooms and bathrooms: this factor directly affects the perceived functionality of the property.

• Architectural style and age: renovated properties with modern design and quality finishes tend to stand out more than older, outdated ones.

• Outdoor spaces and extras: elements like terraces, balconies, or gardens add value, especially in urban areas.

Location and proximity to essential services

Another crucial aspect in valuation is the property’s location. This can affect both the quality of life of future residents and the market price:

• Access to public transport: good transport connections increase the property’s appeal and widen the range of potential buyers.

• Proximity to schools and amenities: nearby facilities —such as schools, supermarkets, or health centers— directly impact the perceived quality of life.

Size and type of property

Finally, the property’s size and type are key in the overall evaluation. Larger homes are generally more valuable, but so is their potential use.

Techniques for obtaining prices and valuing properties

As an agent, you need to support your recommendations with reliable data and tools. Here are some techniques you should use:

Researching the original and historical price of the property

Understanding the property’s price history is key to interpreting its current value. Some actions you can take include:

• Analyzing previous listings to detect price variations and demand changes.

• Checking the sale history to learn the actual closing price.

Estimation using online tools and databases

Databases and property platforms make it easier to obtain estimates. These can help classify market segments and offer useful comparisons:

• Real estate portals: comparing similar properties on professional portals helps you understand price environments and detect saturation or niche opportunities.

• Specialized platforms and big data valuation tools: at Engel & Völkers, our agents have access to proprietary tools and an extensive advanced database, allowing them to analyze the market in greater depth than average.

Calculating the average price per square meter

The average price per square meter is an excellent metric for assessing properties in a given area. This calculation is a fundamental step in market price analysis.

The key is to gather a sufficient sample of properties in the same area and with comparable characteristics. This helps establish a realistic range between minimum, average, and maximum values.

Applying the average price to the evaluated property

Once the average price is established, it’s multiplied by the property’s size to obtain a market value estimate. Adjustments are then made based on extras, renovations, or unique features.

Analysis of comparable properties in the specific area

Good comparison is what makes the difference between a generic estimate and a professional valuation. It’s important to pay attention to the following aspects:

Selection and characteristics of similar properties

You should look for properties that share the same criteria as the one being evaluated:

• Type of property: apartments, villas, single-family homes, etc.

• Architectural characteristics: age and style.

• Surface area: total size of the property and of each room.

Search radius and geographic criteria

The search should be limited to a specific radius, usually between 2 and 3 kilometers. These properties must share the same characteristics as the local market.

Analysis of sale prices and time on the market

Studying both the sale price and the time properties have been on the market is critical to determining an appropriate strategy. It’s essential to know:

• How long it took for similar properties to sell.

• Whether there’s a pattern of price reductions.

• Which properties remain on the market after months of publication.

Differentiation between sold and for-sale properties

Identifying the differences between sold properties and those still for sale helps you understand the market. Sold listings provide real market data, while active listings reflect the owner’s perception, which doesn’t always match the reality of closing prices.

Identifying local trends

It’s essential to recognize emerging trends in the area. This includes changes in supply and demand as well as price variations that may affect future investment decisions.

Property inspection and qualitative evaluation

A qualitative evaluation provides valuable insights for the property’s valuation:

• General condition and relevant details: carefully review the overall state, structural conditions, basic installations, and included equipment.

• Evaluation of surroundings and external factors: assess the neighborhood’s safety, access to recreational areas, proximity to shops, transport, hospitals, or schools.

Use of advanced tools in real estate market research

The integration of technology in real estate market analysis has revolutionized the way data is collected and interpreted. Digital tools and advanced platforms enable professionals to access more accurate and relevant information:

• Digital platforms for analysis and real-time data: online platforms provide detailed real estate market analysis, giving access to real-time data on prices, trends, and property features.

• Integration of big data to identify market patterns: big data has become an invaluable asset in the real estate field. By collecting large volumes of information, it’s possible to detect behavioral patterns that influence buying and selling decisions.

At Engel & Völkers, our agents use predictive analysis technology to anticipate market movements and make more accurate decisions.

Competitor analysis and opportunities in the local market

Competitor analysis is essential to identify opportunities and challenges that a property may face in its immediate surroundings:

Identifying differentiating features in the area

Understanding what makes a property unique compared to others in the same area is key. It’s important to analyze:

• Additional services in the property or community.

• Better-maintained surroundings or areas with potential for revaluation.

• Better access to services or transport.

Strategies to stand out in property acquisition

Implementing strategies adapted to the local market is essential to capture the attention of potential buyers. Some effective tactics include:

• Developing marketing campaigns that highlight the unique qualities of properties.

• Using digital channels and social media to reach a wider audience.

• Organizing open-house events to generate interest in available properties.

Study of real estate portfolio and segmentation of potential buyers

Conducting an in-depth analysis of the real estate portfolio helps understand which types of properties are most in demand. The segmentation of potential buyers can be based on:

• Which types of homes sell faster in your area?

• Who is currently buying?

• What do they look for, and what do they reject?

Data interpretation and preparation of the market report

Data interpretation and report preparation are crucial stages in real estate analysis. This phase transforms the collected information into valuable insights that will guide strategic decisions:

• Organization and synthesis of the collected data: classify by area, type of property, price range, time on the market, etc.

• Graphical and statistical representation of prices and trends: create price-per-square-meter evolution charts, comparisons between similar properties, and heat maps by area.

• Recommendations for setting the sale price: include a competitive price range based on similar properties, consider the unique features of the analyzed property, and account for external factors such as area developments or market trends.

External factors affecting the real estate market

External factors play a crucial role in the dynamics of the real estate market. They are essential to properly assess opportunities and challenges that can influence property values:

• Urban development and public policy changes: urban plans, neighborhood rehabilitation, or new public services can all affect perceived value.

• Influence of the economy and macroeconomic variables: interest rates, access to mortgages, inflation, unemployment — as an agent, you must understand these variables and explain how they affect purchasing decisions.

• Impact of real estate sector trends: sustainability, energy efficiency, remote work, and digitalization are redefining buyer priorities.

Frequently asked questions about how to conduct a real estate market study

What is a real estate market study?

It’s a detailed analysis of supply, demand, and prices in a specific area, allowing you to correctly value a property, detect opportunities, and advise clients with rigor.

What is the purpose of conducting this type of study?

It helps set realistic prices, acquire properties with solid arguments, understand potential buyers, and stand out as an agent in a given area.

What data do I need to collect?

Physical characteristics of the property, location and nearby services, historical and current price, comparisons with similar properties, local market trends, and external factors.

What tools can I use?

Real estate portals for comparisons, proprietary or professional databases, software with big data analysis, and price-per-square-meter metrics.

How do I know if a property is properly valued?

By comparing its price with similar properties within a 2–3 km radius, analyzing how long they take to sell, and detecting frequent price reductions or stagnation.

What factors influence a property’s value?

The property’s condition, size, location, renovations, extras (balconies, gardens), and external context such as new infrastructure or economic changes.

How should I present the study results?

In a clear report, with structured data, comparative charts, and a price recommendation adjusted to the market.

Become a reference: start by mastering your market

Carrying out a real estate market study is not just a technical task — it’s a clear sign of professionalism. Agents who master this tool have more arguments, more confidence, and greater success in their operations.

At Engel & Völkers, we believe in a model based on knowledge, expert guidance, and the use of high-level tools. If you’re looking for a brand that will boost your development as an agent, this could be your next step. We’re here to help you achieve it.