Home sales are actually up this month, check out the HAR report. Still, the inventory of homes, foreclosures and new construction all play a part in the comparative market analysis for a particular area, and the local economy plays a big part too. If you plan on moving in the next five years you may want to avoid buying in an area where values have been deteriating and buy where value has remained more consistant. Check out the subdivision on a weekend when most people are home. Do you see familys out and about with children playing etc; ASK the neighbors who actually live there!
The most comun method to determine value on residential properties is "The sales comparison approach"
The sales comparison approach in a real estate appraisal is based primarily on the principle of substitution. This approach assumes a prudent individual will pay no more for a property than it would cost to purchase a comparable substitute property. The approach recognizes that a typical buyer will compare asking prices and seek to purchase the property that meets his or her wants and needs for the lowest cost. In developing the sales comparison approach, the appraiser attempts to interpret and measure the actions of parties involved in the marketplace, including buyers, sellers, and investors.
Data collection methods and valuation process Data are collected on recent sales of properties similar to the subject being valued, called "comparables". Only SOLD properties may be used in an appraisal and determination of a property's value. Sources of comparable data include real estate publications, public records, buyers, sellers, real estate brokers and/or agents, appraisers, and so on. Important details of each comparable sale are described in the appraisal report. Since comparable sales aren't identical to the subject property, adjustments may be made for date of sale, location, style, amenities, square footage, site size, etc. The main idea is to simulate the price that would have been paid if each comparable sale were identical to the subject property. If the comparable is superior to the subject in a factor or aspect, then a downward adjustment is needed for that factor. Likewise, if the comparable is inferior to the subject in an aspect, then an upward adjustment for that aspect is needed. The adjustment is somewhat subjective and relies on the Appraiser's training and experience. From the analysis of the group of adjusted sales prices of the comparable sales, the appraiser selects an indicator of value that is representative of the subject property. It is possible for various Appraisers to chose different indicator of value which ultimately will provide different property value.
Steps in the sales comparison approach 1. Research the market to obtain information pertaining to sales, and pending sales that are similar to the subject property. 2. Investigate the market data to determine whether they are factually correct and accurate. 3. Determine relevant units of comparison (e.g., sales price per square foot), and develop a comparative analysis for each. 4. Compare the subject and comparable sales according to the elements of comparison and adjust as appropriate. 5. Reconcile the multiple value indications that result from the adjustment (upward or downward) of the comparable sales into a single value indication.
I hope this info helps. Regards AP
We've been living in the Northern Point subdivision since 2006. The reduction in home prices was because there were several bank foreclosures during the recession. Looking recently it appears all of those have worked their way out of the subdivision and all have now new owners. Our subdivision is back on the rise again in terms of prices. This is a solid family subdivision with varied occupations: teachers, policemen and women, college professors who have been here a long time. Its a very family friendly place where folks know each other and their kids by first name, looks out for each other, kids play on the streets and Halloween is a very noisy and busy affair with kids everywhere. We love it. Recently access in and out of the subdivision has improved greatly so traffic flow is better. It still feels like the country (we have deer occasionally run around) yet its actually only 5 min drive to 249.
Crime is very low. Although I never recommend wherever you are we have absent mindedly left out garage door open, and our doors unlocked and slept through it.