Lack of comps

[Restrain]

Wife just did one, in SE quadrant of a growing county. For this style home, 1-5 acres, 2500-4000 SF, 4 sales in the LAST YEAR. Sometimes you just use what you've got. Don't complain. Do your research, cite your research, explain your findings, then truck on.

 

[Mike Boyd]

Define your neighborhood, do a 12-month survey of comparable sales. Arrange the sale dates in quarters of a year. Compare the quarters and you'll likely be able to identify a price trend.

If, for instance, the trend in sale prices has been declining year to date, you should be able to apply a % adjustment to dated sales at a rate supported by your 12-month analysis.

You could also compare a 12-month statistical analysis of your subject neighborhood with other competing areas and derive a locational factor. That is..If there is a fairly similar area with more contemporary close dates you might be able to apply a locational factor using a matched pair analysis.

You could then include your dated comps (with market condition adjsutments) from the immediate area then include more recent sales from competing areas using a locational factor adjustment (along with market conditions adjustment).

If you go outside your defined neighborhood boundaries you better explain in detail....

Good response, Blue.

 

[CANative]

Pricing beyond market acceptance is what keeps property from selling. If nothing in that higher price range is selling despite there being some inventory then the market is stating that they only want lower priced property. REO flooded markets scare off people who might otherwise purchase a higher tier (and higher priced) property because they don't want to be fools or they don't want to pay for a declining asset with nothing to instill some confidence that they will eventually recoop their investment within the holding period.

This can probably be converted to a supportable opinion of what those higher priced (higher tier) properties would sell for in this type of market despite a lack of sales (what would it take to move that property?). I think the extra work in developing this hypothesis is better than just searching for property sales in different locations because that method doesn't do anything to demonstrate the market in the subject's location.