"Within 1 Mile" is often a very dumb rule. It works sometimes. It can work as a guardrail, IF you regard it as a minimum but not sufficient requirement. You often have average or substandard areas very close to high-priced areas within that radius of 1 mile. Direction is also important. Also, real estate housing lacks continuity. Many of the subdivisions built in and around Sacramento in the 2000's were good evidence of this chunkiness. You get one subdivision of homes Mediterranean style next to older California style homes. Different new subdivisions were next to other new subdivisions that were higher priced with different features. Each subdivision has it own limited selection of home styles. If you look at a large area, you will only see "chunky" patterns that are discontinuous at certain boundaries. To get a good selection of comparables in older areas, you often have to go beyond 1 mile and in areas with mixed subdivisions, with numerous updates, some older, some newer homes, perhaps custom homes, things can get complicated.
Of course, in Texas, there can be isolated areas where the 1 mile radius might work. But I would question whether that works in say The Woodlands, TX contained in Spring, Texas, without the use of boundaries rather than distance. Then, I can also bring up the notorious highway corridors from Conroe, through The Woodlands and south to Houston, which impact pricing. Oh, and don't forget the schools, which definitely impact price, especially in The Woodlands/Spring Texas.
A better method is to use Market Areas or Neighborhoods of conforming structures, geographical features and amenities. Cluster analysis can be used to define such areas using recent data. I often use MLS Area designations - which usually work out pretty good. Kriging is a statistical method that CAN work with adjacent neighborhoods that show some continuity in pricing, with a pricing shape or direction that flows up and down in a certain direction. But that takes some experience and understanding of math and statistics to use.
Always remember that geographical pricing trends tend to be "chunky" rather than continuous - and that implies you are going to want to use non-parametric methods such as MARS rather than these SILLY parametric methods taught in so-called real estate/appraisal classes that depend on traditional parametric statistics.
You can't be blamed for this nonsense, the Appraisal Institute courses are extremely backwards in their concepts - and that goes back to TAF, which should be abolished. All the leaders of those organizations, pretty much, decry any other methods of appraisal than the traditional. These are organizations that disconnect any appraisers and other professionals who don't abide by their outdated beliefs and doctrines. They can be recognized, invariably, by 4+ designations after their name, such as MAI, SRA, ASA, AI-GRS, CRE, MRICS/FRICS and so on. The real joke is that these "leaders" always proclaimed by TAF organizations for being "futurists" in appraisal; when there has never been anything "futuristic" or visionary about them. At best, they are just good appraisers who use the same tools they were taught to use by TAF related organizations, methods that are decades old, methods created a long, long time ago. Everything the claim as original is a copy of something someone else already created. Humorous are their patent applications that get rejected by the US Patent Office as concepts "already discovered." - A permanent record of their attempts to patent existing technology and claim it as their own. Shame, shame on them. And this on public record FOREVER.
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