Understanding Your Local Housing Market

The Nigerian housing market has been a structural impediment to economic growth since the price collapse started in 2008. Recently, a number of price indices, sales reports and anecdotal stories are pointing to an apparent housing recovery since 2012. This may or may not be a boon to the broader economy, but what does it mean for local markets?

Finding Analysis and Data

Too many homeowners and renters make the mistake of looking to national data to understand their local housing market. National data are averages of local data. They are measures of the country as a whole. Any relevance to local markets is swamped by the sheer preponderance of data.

A good place to start for local data is to talk to your realtor about home sales inventories. This inventory is the number of homes available for sale or waiting to be put on the market. High inventory means a slow market, while low inventory means a competitive market. Home prices have an inverse relationship to home inventories: when inventories rise, prices fall. Market participants can use inventory data to estimate when to put their house on the market.

Online Information

Plenty of resources about local prices can be found on the Internet. Websites such as cityworksnigeria.com and privateproperty.com.ng list data about multiple aspects of home buying. Potential buyers can search based on size, price, amenities and location. The Internet is one of the top sources for information about local housing markets.

Economic Conditions

Residential property is subject to supply and demand like any other market. Local economic conditions can provide clues why inventories are so high and prices are so low. Consider the Telecommunication boom in Nigeria in our not so distant past; jobs were so plentiful, people were coming from across the country to find employment. Home prices are skyrocketing because inventories are almost down to nothing due to strong demand.

Talk To Realtors

Finally, perhaps the best source of information about local housing markets is local realtor companies and agents. Their job is to pay attention to local conditions so they can sell homes to customers. The Internet may be a great source of data, but only boots on the ground can tell customers how things are to an absolute certainty. Real estate agents can provide that certainty. Trends and dynamics only visible to the naked eye can disappear in aggregated statistical data.

Egedi OLuwatoyin