It is important to analyze all competing projects that have been launched or are likely to come on board within the 5-year period of the investment. Along with the characteristics of competing projects, it is valuable to understand how many units have sold, at what price they were sold, and what the current inventory level is of competing projects. Moreover, it is important to know the developer’s financial situation. A cash-pressured developer is more likely to “burn the market”, basically lowering the price to the lowest possible level just to generate cash.
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