How many times have I heard, “My house is worth what?”, when I delivered the bad news about the current value of someone’s home? Some of these were homes that I helped the owners buy back in the early 2000’s. Even with all of the press and TV news coverage locally, many people just cannot deal with the 30-40% loss in what they thought was the value of their homes or at least what it was when they bought.
I’m doing some research this weekend, in preparation for publishing yet another post on the impact of the recession locally and to use in listing meetings I’ve decided to look at three typical sub-markets within the market that makes up the little Village where I live. I will take a look at some typical starter homes, some typical mid-market move-up homes and then some of our luxury homes. I’m fortunate to have 3-4 examples of fairly homogeneous starter home neighborhoods, 2-3 mid-market developments and a couple of luxury neighborhoods. I might also look at the historic home segment, since they make up the core of the Village housing stock.
What I want to analyze are a few different cuts at these markets. I want to use sold data to find the averages and medians for each market among homes that have sold over the last year or two. Then I want to strip out the homes in that sold group that were bank owned or short sales and see what the numbers are for non-distressed homes. I know that the distressed sales had an impact, but when you take their artificially low sold prices out of the CMA numbers one should get a better idea of what a typical, non-distressed seller might expect.
Next I want to look at these neighborhoods fro the taxman’s perspective – the assessed values – and see how they have declined in value for tax purposes and how close that matches the market decline. A cursory view of that gap in the past has indicated that the assessors are lagging far behind the downward market price drift, maybe as much as 1/3 to ½ of the decline behind. The local assessors made big cuts last year, but assessed values are still well above market values. I hope to determine by how much.
Why go to all of that trouble? Well, we are looked at by the general public as being the experts on all things about real estate with current home value perhaps being one of the biggest areas of expected expertise. I think it is important to have data about the local market available, not just a few comps; and to know what that data indicates about value trends in that market.
If I’m going to look a potential seller in the eye and tell him that the house that he bought in 2006 for $400,000 is worth $275,000 on today’s market, I’d better have proof. Further, if I’m going to ask for a 1 year listing because the average DOM for that price band in running 12-15 months, I better be able to back that up. At least that’s the way that I feel about it. The data is all there in the databases that are run by the local MLS’s. It’s really a matter of taking the time to find it and analyze it. I’ll let you know how my little study comes out.
I’m doing some research this weekend, in preparation for publishing yet another post on the impact of the recession locally and to use in listing meetings I’ve decided to look at three typical sub-markets within the market that makes up the little Village where I live. I will take a look at some typical starter homes, some typical mid-market move-up homes and then some of our luxury homes. I’m fortunate to have 3-4 examples of fairly homogeneous starter home neighborhoods, 2-3 mid-market developments and a couple of luxury neighborhoods. I might also look at the historic home segment, since they make up the core of the Village housing stock.What I want to analyze are a few different cuts at these markets. I want to use sold data to find the averages and medians for each market among homes that have sold over the last year or two. Then I want to strip out the homes in that sold group that were bank owned or short sales and see what the numbers are for non-distressed homes. I know that the distressed sales had an impact, but when you take their artificially low sold prices out of the CMA numbers one should get a better idea of what a typical, non-distressed seller might expect.
Next I want to look at these neighborhoods fro the taxman’s perspective – the assessed values – and see how they have declined in value for tax purposes and how close that matches the market decline. A cursory view of that gap in the past has indicated that the assessors are lagging far behind the downward market price drift, maybe as much as 1/3 to ½ of the decline behind. The local assessors made big cuts last year, but assessed values are still well above market values. I hope to determine by how much.
Why go to all of that trouble? Well, we are looked at by the general public as being the experts on all things about real estate with current home value perhaps being one of the biggest areas of expected expertise. I think it is important to have data about the local market available, not just a few comps; and to know what that data indicates about value trends in that market.
If I’m going to look a potential seller in the eye and tell him that the house that he bought in 2006 for $400,000 is worth $275,000 on today’s market, I’d better have proof. Further, if I’m going to ask for a 1 year listing because the average DOM for that price band in running 12-15 months, I better be able to back that up. At least that’s the way that I feel about it. The data is all there in the databases that are run by the local MLS’s. It’s really a matter of taking the time to find it and analyze it. I’ll let you know how my little study comes out.
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