Agung Yuniarto

Politeknik Keuangan Negara STAN

Pokok bahasan

 Concept of levels of market analysis

 Criteria for determining the appropriate level of
market analysis for a given assignment
 Key items to check in evaluating the adequacy of the
market analysis in an appraisal.
Concept of levels of market analysis

Inferred analysis

Fundamental analysis
Concept of levels of market analysis
Inferred analysis
• Study based on historical trends
• Trends in statistical data for the broad market area of similar
properties allows analysts to make inferences (i.e., predictions) about
the expected future performance of the subject property.
• The term inferred demand analysis is used because the analysis does
not directly quantify the demand for a specific property.
• The subject property demand is inferred from general data analysis
on the basis of historical data indicators
• Also called trend analysis, similar to the technical analysis practiced
by stock market analysts.
Concept of levels of market analysis
Fundamental analysis
• Principle that real estate value is tied to the economic utility
• Technique that determines a property’s demand based only on a
direct study of the users of the space.
• Provides a forecast of demand calculated from primary market area
compared to the competition in trade area.
• Focuses on and quantifies the current and forecasted demand by
potential users of space in a specific property rather than by potential
investors in the asset—thus the name fundamental analysis.
Concept of levels of market analysis

Inferred analysis Fundamental analysis

Level A Level B Level C Level D

Tingkat analisis terendah  Tingkat analisis tertinggi

 Level A
An appraiser could use
these data to make
inferences about
demand for all types of
real estate.

Duplex : a house divided into two apartments, with a separate entrance for each
Level B  The nature of the data
used, such as mixing
sales and space
absorption data as an
inferred indictor of
demand.
 An active asset market
may or may not
indicate true demand:
housing bubble of
2006.
 The community- wide
occupancy data
(include malls) would
not likely be a reliable
indicator of
occupancy rates of
neighborhood
 Planned and proposed additions to supply must be weighed against
shopping centers in
current and future demand.
the specific
 The amount of currently occupied space in the subject specific
neighborhood
submarket can be a good indicator of current demand
Level C  Future demand and
absorption are
forecast by first
estimating the growth
of population, income,
and employment.

 Use of primary data,

which are compiled by
conducting field
research and direct
surveys.

 Provides detailed
submarket data on
which to base
absorption and net
operating income
projections.
Level D

 Provides the most detailed type of market and marketability study

 Might include an analysis of urban planning and land use policy, public and
private fiscal capabilities, probability weighting of use projections, and risk
ratings.
 Forecast demand based on employment projections is segmented in greater
detail. For example, the demand forecast for a shopping center may be broken
down into the demand for each retail product line (i.e., types of goods and
services)
 For instance, in a Level D study, jewelry stores, sporting goods stores, and shoe
stores could be analyzed separately for demand and competition.
Pokok bahasan

 Criteria for determining the appropriate level of

market analysis for a given assignment
 Criteria for determining the appropriate level of
market analysis for a given assignment
Appraisers might use the following guidelines to decide which level of
analysis to apply :
• The regulatory requirements issued by government agencies
• The needs of the client or user of the appraisal
• The market conditions prevailing at the time of the appraisal
• The complexity of the property being appraised
Criteria for determining the appropriate level of
market analysis for a given assignment
Pokok bahasan

 Key items to check in evaluating the adequacy of the

market analysis in an appraisal.
TERIMA KASIH