The best way to establish values for residential properties, cono, townhome, or single family is using relevant comparables from previous sales in the market area, and if available, the particular building, subdivision or block. Evidence of closed sales establish comparables from which a market price that a buyer is willing to pay can be determined.
An example of this would be a condo building with lake views on one elevation and city views on another. Almost without exception, a unit in a building with superior views will be more valuable to the available buyer population. The more recent the closed sale being considered as a comparable, the better. In the current market conditions, comparables closed with 3-6 months are considered reliable. You will need to adjust the value of a unit you are considering relative to the attributes of that unit (i.e. views, condition, upgrades, size, floorplan, etc.) vs. a closed sale. This is where the experience of a agent counts most for buyers today.
Investors will typically view value in terms of $/sq. ft. This makes the investment process more objective. Investors are constantly struggling to restrain subjective reactions to property from their decision making. For example, if you are looking to buy a commercial building, you are willing to pay a price per square foot based on the average rental income per square foot of that building. This is only one factor investors use in choosing between a twenty unit residential apartment building and a 32,000 sq. ft. retail-residential mixed use building, for example.
Sometimes you hear residential agents speak in terms of sq.ft. This is a very macro-economic view of the residential market. It helps our buyers determine the neighborhood they want to consider. For example, if your agent says that in South Loop, Condo prices range from $200-$380 sq.ft. Using this information, you know you need a minimum of 1500 sq. ft., and you have a budget of $300,000.00, you should also consider other areas. When I am listing a property, I can recommend a price to my seller that is much more specific, because the factors that affect a properties value are absolute.
Hope this helps.
Best of Luck and always willing to be of service.