If you are familiar with the local real estate market, you can answer the question with confidence by stating your level of familiarity and providing specific examples to support your answer. For example, you can say something like:
"I am quite familiar with the local real estate market. I have been following it for several years, and I keep myself updated with the latest trends and developments. I have a good understanding of the different neighborhoods, property types, and price ranges. For instance, I know that the housing prices in the downtown area have been steadily increasing, while the suburban areas are experiencing a surge in demand for single-family homes."
If you are not familiar with the local real estate market, it is better to be honest and say that you are not very familiar with it. However, you can still express your interest in learning more about it and your willingness to do research to become more knowledgeable. For example, you can say something like:
"While I don't have a lot of experience with the local real estate market, I am eager to learn more about it. I have already started doing some research on the different neighborhoods and property types. I am confident that I can quickly become familiar with the market and provide valuable insights to your team."