PREVNEXTSUBMITTable of ContentsResourcesGlossaryTranscriptClear and return to MenuSearch ResultsFilterSlide TextTranscriptSearch in:Check to includeSearch...TermsDefinitionFINISHfinishdefinitionresourcessearchpauseplayreplaysubmitnextpreviousvolumeSUBMIT ALLsubmit allQuestion ListMore infoSend an emailCloseBioExit real estate market analysis real estate market analysis dr. greg smersh introduction introduction in this presentation we will discuss real estate market analysis. geographic information system, or gis, will be introduced.gis combines different types of data to produce a variety of maps and spatial analyses. gis was initially used to analyze:agricultureweatherforestrypollution what is gis? what is gis? gis: computer system designed to capture, store, manipulate, analyze, manage, and present spatial data. ! as computers have become more powerful, gis has been utilized for business applications. ! as computers have become more powerful, gis has been utilized for business applications. mapping systemprovides information on roads and other geographic featurescalculates routes and travel time gis satellite-based navigation systemgps in cars is a combination of gis & gpsdesignates the location of your vehicle/cell phone gps gis is a system gis is a system baseline data usgs property data county gis data census data department of commerce ! gis is a combination of all these along with methodologies for analyzing data. ! gis is a combination of all these along with methodologies for analyzing data. while gis is a computer system, it really is much more.gis has demanding hardware requirements.until 2000, home computers lacked the capacity to efficiently run gis. ! building a gis requires background in geography and market data analysis. ! building a gis requires background in geography and market data analysis. additionally, features can be subdivisions of land such as:city boundariescensus tractsland parcelsgeographic features are represented as:pointslinespolygons layers and databases layers and databases gis: software that can simultaneously run up to several hundred databases. gis: software that can simultaneously run up to several hundred databases. point layers customers line layers streets polygon layers many features ! gis is like a spatial spreadsheet, and can perform queries based on both spatial and non-spatial information. ! gis is like a spatial spreadsheet, and can perform queries based on both spatial and non-spatial information. property data property level data comes from the county in which the property data is located.using land use codes, we can categorize different property types.we could also conduct a property search based on geographic and non-geographic specifications. property data property data in tampa hillsborough county property data in tampa hillsborough county census data census data demographic data from the u.s census is available in various geographies.thematic maps can serve several purposes:provide specific informationprovide general informationcompare patterns on multiple maps thematic map: a map designed to show a particular theme connected with a specific geographic area. thematic map: a map designed to show a particular theme connected with a specific geographic area. univariate map: map showing data of the same kind. univariate map: map showing data of the same kind. bivariate map: map showing two distinct sets of data. bivariate map: map showing two distinct sets of data. gis can also be used to aggregate data from one layer or database to another. gis functions gis functions point-in-polygon polygon-on-polygon ! the polygon-on-polygon overlay is a powerful gis procedure. ! the polygon-on-polygon overlay is a powerful gis procedure. ! the overlay procedure acts like a big “cookie-cutter.” ! the overlay procedure acts like a big “cookie-cutter.” market areas real estate market analysis is really an art.radial rings are often used for a basic market area because of their simplicity. market areas market area: the defined geographic area in which the subject property competes for the attention of market participants. market area: the defined geographic area in which the subject property competes for the attention of market participants. ! a major limitation is the fact that they do not account for any physical boundaries that make the site less accessible. ! a major limitation is the fact that they do not account for any physical boundaries that make the site less accessible. data analysis data analysis gis offers a wide range of analytical tools for various applications customer base percentage 3 mi. 70% 3 mi. 70% 5 mi. 90% 5 mi. 90% when considering multiple sites, gis can quickly aggregate census data.can be used to assess the level of competition.they can also help to quickly identify factors that are important in retail location. ! many companies have demographic profiles that gis can help to identify as successful. ! many companies have demographic profiles that gis can help to identify as successful. gis offers a wide range of analytical tools for various applications. conclusion conclusion gis can present a huge advantage to real estate investors, developers and economic development organizations.gis provides a better perception of market dynamics and helps with real estate decisions. end you have reached the end of this presentation.<html><textformat leading='1' tabstops='[48, 96]' leftmargin='0' indent='0'>In this presentation we will discuss real estate market analysis. Geographic information systems, or GIS, will be introduced as a powerful tool that can analyze real estate market data in ways that would otherwise be impossible. It can combine different types of data to produce a variety of different maps and spatial analyses. </textformat></html><html><textformat leading='1' tabstops='[48, 96]' leftmargin='0' indent='0'>GIS is a computer system designed to capture, store, manipulate, analyze, manage, and present all types of spatial data. Essentially, it is a computer-based tool for mapping and analyzing events on earth, and it has been around for over 50 years. In fact, early applications focused more on physical geography, and GIS was initially used to analyze natural phenomena such as agriculture, weather, forestry, and pollution. As desktop and laptop computers have become more powerful, GIS has been utilized for business applications such as locating retail stores, optimizing transportation solutions, and enhancing marketing strategies. To differentiate between GIS and GPS, GIS is a mapping system while the global positioning system, or GPS, is a satellite-based navigation system that provides location information to anyone with a GPS receiver. The GPS navigation in cars and cell phones is actually a combination of both GIS and GPS, and is really more of a GIS. The GIS provides information on roads and other geographic features, along with gas stations, restaurants, and other points of interest. The GIS also calculates routes and travel time, while the GPS simply designates the location of your vehicle or cell phone within the GIS mapping system. </textformat></html><html><textformat leading='1' tabstops='[48, 96]' leftmargin='0' indent='0'>While a GIS is a computer software system, it really is much more. A GIS can have demanding hardware requirements, both in hard drive space and processing speed. In fact, up until around the year 2000, home computers lacked the computing and storage capacity to efficiently run GIS. A GIS also requires data, which comes from a variety of different sources. Baseline data such as streets and waterways come from the United States Geological Survey or USGS. Property data comes from the county in which it is located, and includes both a geographic file with parcel boundaries and data that is attached to the parcels. Census data comes from the Department of Commerce and again includes both geographic files with census tract boundaries, county boundaries, etc. and the associated demographic data. More importantly however, GIS is a combination of all these along with methodologies for analyzing data. Building a GIS requires considerable background in geography as some of the data files are likely to have different geographic projections. Conducting analyses using GIS also involves some background in the techniques and procedures used to analyze market data. However, some companies and organizations now offer web-based GIS applications that make some of these analyses much easier. Image Source: Maptitude http://www.caliper.com/maptovu.htm </textformat></html><html><textformat leading='1' tabstops='[48, 96]' leftmargin='0' indent='0'>Basically, GIS is software that can simultaneously run up to several hundred databases. These databases are attached to layers of geographic features which represent various things that are located on earth. They can occur naturally such as rivers and vegetation, or they can be constructed such as roads and buildings. Additionally, they can be subdivisions of land such as county boundaries, census tracts, or land parcels. GIS also allows the user to create features such as market areas or the location of customers. These geographic features are represented as points, lines, or polygons. Examples of a point layer might be customers, while line layers are most often used for streets. Polygon files are most common and can be used for a wide variety of features including building footprints, parcel boundaries, census tracts, and market areas. Note that in GIS, a circle such as a 2-mile radial area is technically a polygon - it just has so many sides that it looks like a circle. Attached to each layer is a database containing information. For example, property data is attached to parcel boundaries while demographic data is attached to census tracts. These different layers interact to analyze data and even to create new data. For example, a street database can be used to create a customer file using a procedure that finds their address on the map and creates a point 50 feet to the right or left of the street based on the address information. A GIS is like a spatial spreadsheet, and can perform queries based on both spatial and non-spatial information. For example, we could do a search for all three bedroom houses within 2 miles of USF that had sold within the last three months and export as an Excel file. Image Source: Maptitude http://www.caliper.com/maptovu.htm </textformat></html><html><textformat leading='1' tabstops='[48, 96]' leftmargin='0' indent='0'>Again, property level data comes from the county in which the property is located, so if we’re interested in Tampa, we would go to the Hillsborough County property appraiser’s office website. There we can download the geographic parcel files and the associated property data that includes attributes such as property type, square footage, age of the building, lot size, and any sales information. Using the land use code, we can categorize different property types and perhaps identify on the map with a color-coded theme. We could also conduct a search for example, for any vacant commercial property with a size of one and one and a half acres, within 5 miles of USF. Or, we could analyze the data. For example, we could calculate the total amount of retail square footage within 1 mile of USF by selecting all retail properties based on their land use code and then summarizing the associated data which would produce the total square footage and the average size of all retail buildings. Image Source: Maptitude http://www.caliper.com/maptitude/sample_slides/Sample_12.htm</textformat></html><html><textformat leading='1' tabstops='[48, 96]' leftmargin='0' indent='0'>Demographic data from the U.S. Census is available in various geographies which would be determined based on the map scale. A map designed to show a particular theme connected with a specific geographic area is referred to as a thematic map. Thematic mapping provides for a better way to understand and evaluate data by creating graphic displays, using information stored in the GIS database. These maps can portray physical, social, economic, or any other aspect of an area. Thematic maps can serve several purposes. They can provide specific information about particular locations, or they can provide general information about spatial patterns. Additionally, they can be used to compare patterns on two or more maps. Common examples are maps of demographic data such as population density. Here it is important to have a basic cartographic principles. For example, a thematic map of the general population should not be simply the number of persons, but rather in terms of density, that is, the number of persons per square mile. A thematic map is univariate if the data is all of the same kind. Population over age 65, per capita expenditures for drug stores, and household income are examples of univariate data. Bivariate mapping shows the geographical distribution of two distinct sets of data. For example, a map showing both the population over age 65 and per capita expenditures for drug stores may be used to explore a possible correlation between the two phenomena. Image from: http://www.nygeo.org/theme2.html <tab></tab> </textformat></html><html><textformat leading='1' tabstops='[48, 96]' leftmargin='0' indent='0'>GIS can also be used to aggregate data from one layer or database to another. Two very powerful GIS functions are the point-in-polygon procedure and the polygon-on-polygon overlay. An example of a point-in-polygon would be to count the number of office buildings within an area and calculate the total number of buildings, the total square footage, or some other attribute. An example of a polygon-on-polygon overlay would be to aggregate census data from census tracts to a user-defined area such as a 3-mile radius around a site. The polygon-on-polygon overlay is a powerful GIS procedure because demographic data is collected in irregular geographic regions such as census tracts. If we are analyzing a site, and wish to calculate the number of persons within let’s say a 3-mile radius, then that radial or market area will cut through some of the census tracts. The overlay procedure acts like a big “cookie-cutter” and calculates the proportion of a census tract that is within the market area and allocates the proportional number of persons from that census tract to the total population count for the market area. Point-in-Polygon image from: http://www.sbdcnet.org/how-to-start/convenience-store <tab></tab> </textformat></html><html><textformat leading='1' tabstops='[48, 96]' leftmargin='0' indent='0'>Real estate market analysis is really more of an art and than a science, and there is no clear definition of a market area or how it should be measured. According to the Appraisal Institute, a market area is “the defined geographic area in which the subject property competes for the attention of market participants.” However, determining the appropriate geographic area to measure the balance between jobs and housing and/or between housing and shopping is a challenge. Regardless, there is no generally accepted geographic scale for any market areas. Radial rings are often used for a basic market area because of their simplicity - everyone understands a 1-mile or 3-mile radial area. However, this measure of a market area has weaknesses. A major limitation is the fact that it does not account for any physical boundaries that would make a site less accessible. One solution to this is the notion of a drive time market area that considers physical boundaries and road networks. However, this requires more effort and a reliance on computer software that may not always be accurate. For this reason many analysts continue to prefer radial market areas. <tab></tab> </textformat></html><html><textformat leading='1' tabstops='[48, 96]' leftmargin='0' indent='0'>GIS offers a wide range of analytical tools, for various applications. Many firms track information on their customers and then perform spatial analysis. Using GIS, they can determine the percentages of their customer base that are located within various areas - for example, they might determine that 70% of their customers come from within a three-mile radius and that 90% of their customers come from within a five-mile radius. Or, individual customer point data can be grouped to a certain geographic level, such as zip codes, and mapped according to their level of sale. This helps companies to define their market area and determine the optimal spacing of their retail locations. When considering multiple sites, GIS can quickly aggregate census data to determine the population characteristics within market areas for different sites. Additionally, it can be used to assess the level of competition by measuring either the number of competitors or the square footage of a particular property type within a market area. And, they can help to quickly identify factors that are important in retail location. For example, grocery store chains have to closely study trade areas for new development. They have found that some people tend not to cross certain boundaries, impacting a potential site's overall draw. With GIS, an analyst can quickly rule out sites that don't meet specific criteria - even if they otherwise appear ideal. Many companies have demographic profiles that GIS can help to identify as successful, and then use to locate new stores. For example, Wendy’s looks for areas that are more concentrated with family households, rather than empty nesters. Starbucks looks for areas where smartphone ownership is higher than usual. <tab></tab> </textformat></html><html><textformat leading='1' tabstops='[48, 96]' leftmargin='0' indent='0'>In this presentation we’ve discussed real estate market analysis using GIS. This technology can present a huge advantage to real estate investors, developers, and economic development organizations. A geographic information system might be based on a digitized aerial photograph with up to 100 layers of additional information, including roads, demographics, and the location of various businesses. Additional data layers can be added for retail, office, and industrial building availability depending on the end use. Many companies use GIS to achieve a better perception of market dynamics and to make important real estate decisions such as determining market areas and locating retail stores. <tab></tab> </textformat></html>