Market Heatmaps Identify Patterns and Trends
Real estate technology is predicted to reach $17.22 billion by 2029, and heatmaps are expected to contribute significantly to that number. Market heatmaps present real estate data in graphic format. They help property investors identify patterns and trends in a given market. They reveal metrics such as rental prices, home prices, vacancy rates, and others using color coding. For example, red can show values bordering on extreme, and blue can indicate less pronounced trends.
Market heatmaps make it possible to identify profit opportunities, such as areas where demand for real estate is increasing while supply is decreasing. They also let investors see areas to avoid. The types of heatmaps are sales, rental, vacancy, and, of course, price heatmaps.
Sales Heatmaps Reveal the Most Active Markets
Sales heatmaps show real estate agents and investors which markets are most active. These market heat maps show the level of real estate sales activity in a given area. The maps are color-coded, with red showing the most sales. Different colors represent the different number of properties sold in each neighborhood. Sales heatmaps can help stakeholders identify areas where there are a lot of sales, indicating elevated real estate demand.
You can use a heatmap generator to determine which neighborhoods have the most appreciation potential.
Rental Heatmaps Show Rental Price Intensity in a Given Neighborhood
Rent prices have increased by almost 30% since before COVID-19. As of January 2023, rental properties had become 3.4% more expensive year-on-year, compared to an average increase of 4.1% in 2018 and 2019.
Rental heatmaps are used by people who want to purchase and rent out real estate properties. They give investors insight into rental price developments in different areas.
Again, these maps are color-coded, with red showing the most expensive properties to rent. They identify the neighborhoods with the highest demand for rentals and where they can make the most from renting out properties. These heatmaps also help identify neighborhoods where rental properties are too cheap to be worth investing in.
Vacancy Heatmaps Show the Highest and Lowest Home Vacancy Rates
Investors who want to know where vacancy rates are the highest and the lowest find vacancy heat maps very useful. The colors on the map show the percentage of currently vacant properties, with red marking the highest percentage.
Vacancy heatmaps reveal excessive supply and low prices due to the high competition. You can also see areas with few vacant properties, where demand for real estate would be high.
Homeowner vacancy rates reveal the number of empty properties that are available for sale. This rate has hit rock bottom in 2024. Conversely, 3% of all homes were vacant in 2008, the highest rate ever.
Price Heatmaps Show Where Property Prices Are Highest
Red on these heatmaps shows the highest prices. Price heatmaps help investors decide where to buy properties depending on real estate market trends. Undervalued real estate in certain areas could have the potential for appreciation.
These maps can also help investors determine the areas that are too costly to invest in.
In the third quarter of 2022, the median sale price of existing homes was $392,000. It declined the following year. In 2022, the median price for new homes was $458,000. It increased by more than $60,000 from 2021. Sale prices of new homes have been increasing consistently since 1965.
