The problem with painting all homes with the same market brush
Trulia Voices is a forum for asking real estate questions. Here is a recent question that I thought would be of general interest:
“The house I'm interested in sold for $307,000 in 2006. The asking price is now $359,000. That seems to high for me with the market in a slump. What do you think?”
Here is the response I gave:
“Of course, the seller can "ask" for any price they want. Will they get a buyer? Not likely if it's overpriced. There can be several valid reasons for the price increase. Perhaps the $307,000 was a "bargain" price, and now the new owner is selling at true market value. Perhaps they made significant improvements. Perhaps the local area has experienced appreciation due to other influences. Without checking comparable properties around this home in its' current condition, no one can say what the current market value should be.”
There's a tendency to think that just because the overall market is currently in decline, that all homes must lose value from their previous selling price. As I indicated, there can be many reasons for a home to hold its' value, or to even increase in value. Every situation is different, and you need to look at the specific local market area, condition of the home, and comparable sales to determine what the current value may be for a given home.
There are areas of the country still experiencing price appreciation. In general, the Phoenix metro area is not one of them. However, even in the Phoenix market, there are areas that are doing better than others, such as Tempe. Location, location, location is still a key consideration.
Copyright © 2008 Rod Rebello
www.RodSellsAZhomes.com