I say 'loosely' because there doesn't seem to be an official boundary for the area and anybody trying to sell in North Dallas might call his house as being in Preston Hollow. Originally, the town of Preston Hollow started around the corner of Preston and Northwest where Ebby has her cute little office and went north and west from there plus a little to the south and east to the Highland Park limit.
Now, many people refer to the area between 75 and Preston as Preston Hollow, and it does contain Preston Hollow Park. But, how far north can you go and still be in Preston Hollow? To LBJ? To Forest? Well, there are some very nice homes and estates in that northern area we usually refer to as North Dallas, but are they really Preston Hollow?
Only you know the address of the property you are considering and whether it will be near Geo Bush when he retires. Continuing with our story...
In the period 6/1/2007 to 6/1/2008 there were 149 homes sold in the same market area loosely called "Preston Hollow" with an average list price of $686k sold for an average of $661k or $230 per square foot on average.
Year over year, the prices increased by 7.8% on average. The selling price compared to listing price firmed up from 95.9% to 96.4%, which indicates solid demand even with the price increase of nearly 8%. The median price jumped from $485k to $545k across the same two years.
Second, to answer your question about how to take into account an apparent drop in values, while each property has to be evaluated individually and the situation on that property evaluated from the seller's perspective, you could just apply the 73.2% factor to the current value, not the listing price. For example, if prices dropped generally by 10%, you could take the current tax-appraised value and knock off the 10% and argue with the seller that prices have dropped by that amount. You will, of course, get push-back saying that the property was renovated or is not part of that market or some other arguably sound reason for not agreeing with your offer.
Cyndie's point is valid, too, that in a particular price range hypothetically the prices might be rising more rapidly or dropping in one price band while rising in another price band.
Unfortunately, the above-$500k homes went from $1.022M avg to $1.025M ($249 vs $258 /sf) in the same periods. So, the total prices didn't rise much on the 80-odd homes, but the price per square foot did.
So, without knowing much about the particular property in question, it would be difficult to give you a strategy because it would be against market statistics. Like Bruce says, You could try just saying the market is down and it is a good offer!
This market analysis is based on the condition, the amenities the house offers or lacks, the location within Preston Hollow etc. Once we know what the house is worth, then you decide how much it's worth to you and make an offer accordingly.
Thanks Ryan Hardin @ JP & Associates Realtors
If you need help and you are a first time buyer call me with out any obligation Joe Vargas (469) 475-9145
My friends bought an excellent deal there for a little under value. I would approach making an offer by being careful to not insult the seller, it depends on condition, location in Preston Hollow and Price. The strategy I use to formulate offers actually results in lower purchase price for buyers versus low balling and not winning the house, or paying higher. Some people use public websites which show the properties sold for certain prices. As a Realtor, I don't charge a fee to my buyer's it is all paid for in the price of the home by the seller, and I always save my clients thousands more dollars than I earn for my services. Of the homes I show in Preston Hollow, I am not showing the same statistics and would be happy to talk with you and share with you about how to win making an offer in Preston Hollow.
You might want to search the MLS for active listings in Preston Hollow. This will show you homes currently listed for sale.
If you find a specific home you are interested in then I would suggest getting a CMA report. This report will show you homes that have recently sold, along with those currently listed.
From the CMA reports you will be able to determine the fair market value.
You can access the MLS, and request CMA reports at no cost using my web site, and others.
Your best bet is a good realtor who knows the area. Have them run comparable sales for you of similar homes in the subdivision or near area to determine the percentage below list price that that home might likely sell for.
I live and work in Preston Hollow and the area stretches from Northwest Hwy to Forest Lane. There are a wide variety of homes in this area as the other agents have mentioned. But I truly can't imagine a home in this area selling at 26% of the asking price. Prices in Preston Hollow were up slightly in 2007. They range from $200,000 townhomes to $45million dollar mansions. You can conduct an MLS search or check a the stats a my web site LydiaPlayer.com
Good idea to really get an idea of the neighborhoods in and around Preston Hollow before you get serious about buying.