I look at the comps with a jaundiced eye. I'm more concerned about WHAT sold than HOW MUCH. Let me explain; in some areas where foreclosures are rampant, check with DataQuick for zip codes in your area, we are seeing "short-sales" plus REO's popping up everywhere. The "Short-sales" are dramatically lowering prices to generate an offer. Since most of the "Short-Sales" seem to be originating with loans made 2005 to present, the "Comps" they generate should be looked at with a grain of salt! They give misleading information. We had a sale where the Sellers had purchased just over a year previously. This was a "Short-Sale", yes, just a YEAR of homeownership! Their "friend" had sold them the house and also originated the loan on the property. They had paid horrifically over the asking and had a loan which was a total "predatory" product. They had purchase the home for $649,000 with much of the overpaying going to closing costs, lender fees, etc. It sold for $449,000!! Now--you look at that "Comp", pull the MLS "history" on this house and see that homes are falling 30%+ in this area??
I'm of a belief we should give these "short-sales" pre-foreclosure, post-foreclosure sales their own section and NOT use them for comparable sales. Of course the bigger question is WHY you would want to put a family INTO this area as more and more loans will be going belly-up in the future!!
I really concentrate on the "pendings" and "Continue to show" properties plus my current ACTIVE listings or the "Competition"!! If you're not setting a new price in our market you are going to SIT there unless you have something so superior in presentation, square footage, lot size, bedrooms, that the product wipes out the competition. If not then PRICE is king!!