How to price a house or condo accurately as housing market experience a downturn?

Answer 1

Check and see what comparable homes have recently sold for in your area to get an idea of what the market will bear. Look up current local listings for similar-sized homes and see how many days they have been on the market - if the number is high, they are asking too much.

Answer 2

Housing market continues to slump. Now we can calculate true value of a property easily. As price decline, we don't need to guess and factor in the potential price appreciation while calculating home value. Without the guesswork, figures are more accurate.

Let's use following example:

Today, a typical 15 years old, two bedrooms condo/townhouse is priced around $500,000 and $550,000 in Sunnyvale, California. Rent for similar condo/townhouse is $2000/month.

If you are a home owner, $2,000/month in rent means $20,000 a year in profit ($24,000 per year in rent, minus $4,000 maintenance costs). A $20,000 income is equilevant of owning $400,000 bonds or CDs, because current yield of 30 Years U.S. treasuries are 5% (5% of $400,000 is $20,000). Bank CDs have similiar yields.

In our example, the two bedrooms condo/townhouse is 20% to 27% overpriced. They should be priced at $400,000.

Our conclusion is to wait for a better entry point. Of course, if you like a particular property, then paying more may be reasonable. You are the only person who can decide how much more premium you are willing to pay.

Answer 3

When the market was hot, you could use comparable sales as far back as a year. I now find myself having to use comparables less then 90 days old to get a realistic idea of how to price a particular property.

Also look at what's currently on the market. When you price your property you don't want to be on the high end of the comparables. There is too much nice stuff out there right now and you'll be waiting a long time to sell.

Visit my web site at http://www.flwaterhomes.com/askjim.html and look at the questions on staging for more information.

Jim Reske, Realtor
ERA Advantage Realty
Port Charlotte, FL

Answer 4

the 150-200 rule; makes sense if you look at a house as an opportunity cost

Answer 5

A realtor can give you an accurate price for your marked and most of them do it for free, but there are sights that do it like HouseValues.com.

Answer 6

Try Godzilla.com it will give you valuable info on what your home is worth it's free Good Luck !