Real Estate Market Trend Analysis for Market Growth- A.CRE

Real estate market trend analysis is crucial for experienced professionals to identify up-and-coming neighborhoods. On a gut level, driving the streets of a community and engaging with residents, even for just an hour or two, can provide a clear sense of place. The arrival of boutique coffee shops or craft brew pubs often signals that a shift in momentum is underway, and so could a noticeable uptick in foot traffic or new public investment to upgrade infrastructure and streetscapes.

While useful, these guidelines are likely to resonate primarily with on-the-ground professionals who can see the signs of change firsthand. But what about the analyst tasked to underwrite a new market on the other side of the country? Or the associate who has identified an attractive acquisition and is trying to convince a manager who only knows the neighborhood by its grittier reputation from years ago? This is where some simple data analysis can be used to quickly quantify a submarket’s trajectory.

Key Indicators of Momentum in Real Estate Market Trend Analysis

One of the best places to start with this type of research is a lesser-known side of the Zillow website found at this link. Here, Zillow broadcasts a wealth of housing data without charge, including home values, rents, and sales activity. The figures are available at various levels of detail down to individual zip codes across the country, and the data is close to real-time, with only a month or two of lag.

Some of the most powerful analysis with this data focuses on home prices and rents, particularly how these have changed over time. If a zip code or group of neighboring zip codes has seen prices and rents climb more rapidly than the market, those are strong signs that local views of that neighborhood and its perceived attractiveness are evolving.

Top Zip Codes in Dallas

Using the above real estate market trend analysis approach, let’s take Dallas as an example and look for zip codes where momentum may be building. Calculating the cumulative change in home values since the onset of the pandemic, three neighboring zip codes rise to the top of the list: 75215, 75210, and 75203. Located in South Dallas near the Bishops Arts District and Deep Ellum, these zip codes have seen home values jump 55%-60% since early 2020, easily outpacing the city of Dallas, which clocked in at a still-healthy but more modest 43%.

Two of these three zip codes also demonstrate robust performance in rent growth (historical figures are unavailable for 75210 as Zillow continues to expand its rental database). Since the end of 2021, both 75215 and 75203 have seen rents climb 10%, again outpacing market trends as Dallas saw rents push only 7% during the same timeframe.

Taken together, the marked acceleration in both home values and rents acts as a strong signal that South Dallas is turning a corner.

Find Demographic Data from the Census in Real Estate Market Trend Analysis

As an additional check of our initial hypothesis about South Dallas, let’s look at some basic population trend lines to determine whether additional signs of rising momentum can be found. For this analysis, we can again leverage public information and avoid costly data subscriptions, this time pulling a few basic indictors from the Census.

As with the housing data, evaluating demographic changes over time can generate powerful insights, especially when comparing against the city-wide baseline, and once again we find reasons to be optimistic about South Dallas. The neighborhood has recorded a 20% increase in total population over the past decade, which is 2.6x faster than the city during the same timeframe. South Dallas has also registered healthy income growth while education levels improved modestly.

Taking a step back from Zillow and Census data, additional research appears to confirm that momentum is building in South Dallas. An online search turns up several multifamily communities that are under construction in the neighborhood even though institutional-quality rentals historically have been scarce here. The competitive landscape of the submarket appears poised for a meaningful shift.

Conclusion

While there is no perfect substitute for on-the-ground expertise, real estate market trend analysis, combined with an expanded understanding of housing and demographic trends, allows us to underwrite in South Dallas with greater confidence. Once the right opportunity comes along, we now have powerful tools to make a convincing case—even to managers, investment committees, or lenders without submarket experience—that South Dallas is worth a closer look.

About Morgan Zollinger: Morgan Zollinger has several years of experience in CRE market research, integrating analytics, finance, and economics to develop actionable insights regarding investment strategies and market opportunities. In a previous role, he acted as project manager for dozens of multifaceted consulting assignments and market analyses, covering various property types in major metros across the U.S. Morgan also previously worked as an intelligence analyst, where he supported U.S. foreign policymaking with a focus on economic issues in the Middle East.