Housing trends are all over the map right now, thanks to the ongoing COVID-19 pandemic, but there are a few things we’ve noticed that you should make a note of, too.
Mortgage rates are lower, home prices are beginning to soften compared to this same time last year, and the housing market tends to have a limited inventory, at least for now.
All are crucial when it comes to a real estate market analysis.
What is a Real Estate Market or Comparative Market Analysis?
An analysis contains current market values compared to a property that is either to be bought or sold. It’s an invaluable tool that helps you decide whether or not the asking price is fair for that market.
Don’t confuse appraised value for market value – they’re different animals. A market analysis compares the fair market price while an appraiser may look at things through a different lens.
When in doubt, always go with a market analysis to determine the fair market value of any given property.
What’s in a Real Estate Market Analysis?
Details about the property and surrounding area are what you’ll find in a market analysis. The analysis helps decide how much a property is worth and whether or not it would be a wise investment.
Having a thorough market analysis to work with also makes it easier to spot if a property is following housing trends in real estate marketing.
In analyzing the property, you need to consider the area as well as the neighborhood and nearby amenities. You also need to look at the size of the house and the lot that it sits on.
How many bedrooms or bathrooms? Are there other rooms? How many floors? Any special features?
Those are all questions that should be answered in the property analysis.
Original Listing Price
If the original listing price has been found, you might see it in the market analysis. The original price can give you an idea of the home you’re considering. In this information, you should also see the builder, which can tell you if this is a custom or cookie-cut home.
Property Value Estimates
Online resources abound to help with this one. Utilities like Zillow Zestimates can show you estimated market values for homes. While not always accurate, it’s a good number to start with, and you might even see housing trends by going through the numbers.
Ideally, the comps in the analysis should be properties that are similar to the one you’re looking at. To be comparable, these properties need to have the equivalent square footage, be located in the same area or neighborhood, have a similar lot size, the same number of rooms, and similar age and features.
Suggested Pricing Range
The ceiling value, or top of your price range, is set by the comp that is similar but worth more than the other properties. Your floor price is set by the comp that is worth the least, putting it at the bottom of your price range.
In-Person Home Assessment
In a perfect situation, you’re going to want to see the property in person to make sure that all factors like condition, features, upgrades, repairs needed, etc., are accounted for in the market analysis. Once the assessment is complete, the market value is determined.
Determine Market Value
Only after all the research has been finished is it time to determine the market value. Keeping an eye on real estate marketing trends can help you decide the best place to expect a property price to sit.
Putting together a real estate market analysis can be hard work, but here at Relotz, our data collections show you what you need to know. Feel good about investing in a property because you know upfront that it’s going to be worth it. Give us a call at 1.844.473.5689 – we’re happy to help!