Research Project Sample
MARK 4378.60
Spring Semester 1998
Market Potential Study Plan
For Real Estate Sales Branch Office
in the Southmost Area of Brownsville,Texas.
By C. Frank Wood (86-3396)
 

Executive Summary

Jokl-Wood & Associates Reality, Inc.  is a Brownsville firm that offers a variety of real estate services. A few of the services that JW&A offers include, both buyer and seller representation in the sale, purchase, or lease of real property. JW&A was organized as a corporation almost ten years ago. They currently have ten licensed real state salesmen or brokers in their office, as well as property management company known as BREMCO (Brownsville Real Estate Management Company) on site.

 Reality, Inc. is interested in knowing if the southmost area of Brownsville can support a possible branch office. The real estate firm is well established in the other areas of the city, but feels that the Southmost area has a growing potential as a source of other business.  The only main limitation of the expansion, and the study, is the fact that the Southmost is predominantly Spanish speaking and traditional with regards to the buying and selling of a home. The language barrier would require that any business conducted out of a branch office in this area be conducted in Spanish; therefore, a real estate salesman located in this area would need to be fluent in Spanish. The traditional factor of the Southmost area is that people tend not to trust outsiders, especially with their homes and money. In order to be successful in this area, the real estate salesman would need to gain the trust of the people he or she will be dealing with.

The analysis of the market through this market study plan is crucial in determining if JW&A should in fact open a branch office in the Southmost area. If this study determines that there is no potential for a market to sustain a branch office, no expenditures should be made. However, if the study proves that there is a potential for a sustaining market, Jokl-Wood & Associates should consider further investment into more in-depth research of the area.

Statement of the Problem

Is there a market in the Southmost area to sustain a real state sales branch office?

Purpose of the Study

The purpose of the study was to conduct an exploratory probe to determine if the results of a a market study sanction further research. The study surveyed a proportion of the residents in the Southmost area, and the results of the survey will determine if they are able to sustain a real state branch office.

Secondary Research

The collection of data related to the real estate industry was necessary in determining the proportion of the total population in order for the study to warrant more research. This data was gathered through the current real estate office of Jokl-Wood & Associates Reality, Inc., and the U.S. Department of Commerce, Bureau of Census. The information gathered was used to develop a break-even analysis and determine that only 5% of the Southmost area is required to take advantage of real estate services in order to make the study successful.

Research Question

The research question to be answered in the study is the following:
Are there enough people willing to take advantage of real estate services in the Southmost area?

Research Design

The study was conducted using a personal door-to-door survey method of the residents in the Southmost area, as defined by the census tracts collected during the secondary research stage of the project. The survey will answer the following investigative questions:
 

 
 Sampling Plan

The survey was designated to use a stratified proportionate random sample. The scope of this survey is to gain data from a sample of the total Southmost area population. This sample can then be used to make assumptions regarding the total population in this area of Brownsville, and warrant further investigation if needed. The sample will be a representation of the 24,680 persons living in the five census tracts (133.02, 134.02, 139.01, 139.02, and 139.03) that constitute the Southmost area of Brownsville. The calculated sample size, utilizing a 95% confidence level and an acceptable sampling error of 5%, will be 52. This is a relatively small sample size due to the calculated data from the break-even analysis performed that states only 5% of the Southmost area population needs to take advantage of the real estate services offered by the branch office in order to make the expansion feasible. The actual number of surveys conducted was 54.

Z= 1.645            n= Þ(1-Þ){Z/E}2
E= .05                n= .05(1-.05){1.645/.05}2
Þ= .05                n= (.0475)(1082.41)
                          n= 51.41
 

Instrument (Questionnaire)

HELLO, I AM A STUDENT AT THE UNIVERSITY OF TEXAS AT BROWNSVILLE. THIS QUESTIONNAIRE IS FOR ONE OF MY CLASSES. PLEASE COMPLETE THIS QUESTIONNAIRE BY CIRCLING THE APPROPRIATE ANSWER, OR BY WRITING YOUR ANSWER IN THE SPACE PROVIDED.

1. How long have you lived in your present home?
        1-5years     6-10 years     11-15 years   16-20 years 20+ years
2. How many homes have you lived in since moving to this area ?___________
3. Did you locate your home on your own, or you use a real estate service firm?
         Own                             Real estate service firm
4. Do you rent or own the house you are living in?
         Rent                            Own
5. Would you consider using a real estate service firm in the sale of your home?
6. Would you consider using a real estate service firm in the search for another home?
          Yes                            No
7. Are you planing on moving in the next?
      1-6 months    7-12 months  13-24 months    unknown

                             THANK YOU FOR YOUR COOPERATION
 
 

Because the Southmost area is mostly Spanish speaking, the survey used will be printed in Spanish. The survey was tested through a small focus group prior to implementation in the field to determine reliability and validity.

Data Collection

The data was obtained directly from the persons taking part in the survey. All data was received immediately since the survey was conducted in  person. Fifty-four surveys were answered before the data was processed.

Data Analysis

Responses to each item on the survey were tabulated into frequency distribution and cross tabulation tables in order to obtain descriptive statistics. The descriptive statistics show the relationship between the instrument questions and the data itself. SPSS was used to develop data analysis.( Data analysis and Tables will be supplied upon request)
Prior to the beginning of the data collection a break-even analysis was performed for a real estate branch office consisting of one real estate sales agent. The break-even analysis showed that only 5% of the total Southmost area population needed to use the services of that office. Therefore, in order to warrant future research, at least 5% of the respondents must indicate that they will take advantage of real state services in the future, whether buying or selling their home.

Results
 

The results calculated from the data collected during the survey indicate that there is a greater than 5% usage rate of real estate services in the Southmost area. The findings indicate that more than 5% of  those surveyed that own home will use real estate services to sell their home and more than 5% of those people surveyed will use real estate services in the search of a new home, whether renting or owning. This would signify that further research needs to be conducted.

 The survey results indicated that 38% of those that own their home in the Southmost area would use the services of a real estate firm in the sale of that home, and that 61.1% would take advantage of real estate services to search for a new home. The proportions gathered are tested bellow to ensure that the sample percentages are in fact greater than the 5% required of the total population.

Owners that will use real estate services to sell their home:

Null Hypothesis;            Ho: p is less or equal to .05
Alternative Hypothesis;  Ha: p is greater than .05
Level of confidence          =    .05
Z critical value                 =  1.645
Sample Size.                  n =54
Sample Proportion         p=    .389
P bar for hypothesis       Þ=    .05
Z obtained from the sample = 11.43
Decision: Reject the null hypothesis because the calculated Z value (Z=11.43) from the sample results on the proportion of owners that will use real estate services to sell their home is greater than the critical Z value (Z=1.645).

Renters and owners that will use real estate services in the search for a new home:

Null Hypothesis;            Ho: p is less or equal to .05
Alternative Hypothesis;  Ha: p is greater than .05
Level of confidence          =    .05
Z critical value                 =  1.645
Sample Size.                  n =54
Sample Proportion         p= .611
P bar for hypothesis       Þ=    .05
Z obtained from the sample = 18.92
Decision: Reject the null hypothesis because the calculated Z value (Z=18.92) from the sample results on the proportion of owners that will use real estate services to sell their home is greater than the critical Z value (Z=1.645).

Incurred Costs

Interviews                                     5 hours x $5.00/hour                               $  25.00
Questionnaire Development      10 hours x $25.00/hour                             $ 250.00
Questionnaire translation              2 hours x $20.00/hour                             $   40.00
Questionnaire production             60 surveys x $ 0.15/survey                      $     9.00
Equipment and supplies                                                                                $    50.00
Conducting survey                        10 hours x $ 5.00/hour                             $    50.00
Survey Analysis and
Recommendation                          35 hours x $ 60,00/hour                           $2100.00
                                                                     TOTAL COST:                          $2524.00
 

Qualifications of ResearcherThe individual performing the research is C. Frank Wood. He is currently a licensed Texas real estate salesman in
Brownsville, Texas working with the firm Jokl-Wood & Associates Realty, Inc.. Frank is a Brownsville native and has a keen understanding of the city's real estate market. Being a Realtor, Frank has an excellent comprehension of the expanding market potential in the Southmost area. Frank realizes that this is a relatively unserved area in the field of real estate services and that there is a great opportunity awaiting to the firm that establishes itself first in this area.