What is a market analysis used for in real estate?

A market analysis in real estate is primarily used to determine pricing and trends in the market. This process involves studying recent sales of comparable properties, known as "comps," to establish a fair market value for a property being bought or sold. By examining these factors, real estate professionals can gauge the current demand for properties, identify market trends, and provide informed recommendations for pricing strategies.

This analysis benefits both buyers and sellers; sellers can set a competitive asking price while buyers can ensure they are not overpaying for a property. Furthermore, understanding market trends helps investors make informed decisions about when to buy or sell properties based on projected increases or decreases in value.

The other options—conducting property evaluations, analyzing financial statements, and assessing rental applications—may play important roles in the broader context of real estate transactions but do not specifically capture the core purpose of a market analysis, which is focused on pricing and market trends.