# How do you size U.S real estate market in 5-10 years?

and Bain Bain & Company BCG McKinsey
New answer on Mar 23, 2021
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Hello!

I would always recommend you to give it a shot and then post it here, this would help you the most.

This is a very typical market sizing case, where the key steps are:

• Calculate the total population
• Calculate # people in a household (~3) and # of houses owned per household
• Calculate the # of transations per year
• Estimate growth

Calculate the % of the total adressable market that any firm in particular could have -in case it´s asked only-.

Hope it helps!

Cheers,

Clara

Hi there,

For this one you can either measure it now and incorporate a growth rate, or measure it in 5-10 years.

Here is how I would break it down:

1. US population
2. # of US households
3. Split by life stage (single i.e flatshare, young couples, families, empty-nesters)
4. AND split by income
5. Then, get a % of each that would own a primary home
6. Remaining % would rent
7. This is a good estimate for the total # of houses/apartments...of course, make sure to divide by 2 or 3 for the groups that share
8. Then, estimate the value of the properties in #5/6/7 to get your answer

Note: Normally splitting by TWO segments is not advised. However, just segmenting by age/life stage OR income is too simplistic here in my view.

Note 2: It's easy to let this get over-complicated. Make sure you structure your math in a clear/organized way...stay as simple as possible!