Wide Value Ranges

[Chris Colston]

Condition of the other sales in the neighborhood is apparently part of the of the reason for some of the lower sales, the second one on the list, $115,000 for 1025 SF still has its blue tarp from the hurricanes last fall. There is a wide range of condition of the properties as one would expect in a 45 year old neighborhood.

Un-huh!! Don't let me say I told ya so...but........ :rofl: I know the area you work in.

 

[Couch Potato]

Chris, when I read your post I thought to myself, how could I forget. :rofl:

Thanks for the reminder.

 

[J Grant]

If you take out the sales under 1000 sf and the very highest sale, the range of value is not so wild. Do research, MLS, interfview...often trend of a gentrifying neighborhood with some older homes rehabbed etc also a neighborhood with investors..I always also check pendings, listings, marketing times a good clue to what is going on there.

 

[Ted Martin]

We're seeing the same thing. Condition doesn't explain the differences in my market. The best explanation I've come up with is that high sales seem to be associated with the same group of agents, lenders and skippy appraiser's. I haven't found any indication of straw buyers or flips. Just stupid, desperate buyers who missed a (as in one) deal and panic into buying the next deal with an over the list price offer and 10% or 20% seller participation (aka Ameridream).

 

[Chris Colston]

CONDITION may not be the factor in your market...it is a big factor, right now, in my market and the market Greg works in. It's called HURRICANE impact. Folks in Alabama, Louisiana and Mississippi will start to see it soon to. There are still (1 year later) listings in MLS that state the owner will replace roof from insurance proceeds. Other houses, in the neighborhood, may have been gutted to the studs and rafters after the hurricanes and have just now been completed. My very own roof is only 4 months old, while several neighbors still have original roofs, others have been patched. If we all went on the market, TODAY, you would find just as wide of a spread due to condition.

Greg even said so:

The price difference in the Feb. and May sales was due to the Feb. purchase being a pre-forclosure sale, significant work being done on the property after purchase in Feb. (some hurricane related) and the May purchaser buying the first home she looked at.

Condition of the other sales in the neighborhood is apparently part of the of the reason for some of the lower sales, the second one on the list, $115,000 for 1025 SF still has its blue tarp from the hurricanes last fall. There is a wide range of condition of the properties as one would expect in a 45 year old neighborhood.

 

[KD247]

I'm half joking, but half serious...

If someone from this neighborhood was to cash out and move to somewhere in Peru where houses cost between $8,300 and $21,850 , do you think they would spend much time worrying about the difference in prices?

If someone from another area sells their home and ends up with $1,500,000 in cash, how much time are they going to spend analyzing the difference in your local prices? If the house with the pool is $75,000 more, it isn't going to shock them.

Our neighbors who moved to Maine bought a huge, fully renovated home for $350,000 or so. They were shocked to find such a bargain. I bet the locals were couldn't stop making fun of the stupid Californians.

Or, when speculators are frothing at the mouth, and have the comfort of 103% financing, how much consideration are they going to give to the difference in price? They're going to buy anything they can (whether these are valid sales or not is another topic).

I bet that your value range will narrow considerably as you inspect the sales and talk to owners and agents in different parts of the neighborhood. But, you're bound to reach a point where the market considers the price difference insignificant. In some areas there's a 2% range and in others a 40% range. Past that point, statistical analysis won't be of any use and you'll have to just use your best judgement to select a specific value point in that range. You can't be more precise than the market.