Analyzing comps from 2013 are going to take more thinking this spring than your typical year. In the past 10 years, we’ve gone from a market of houses always appreciating to losing value. Until 2013. The market came back fast and furious…..until about August/September. Despite all of 2013 being the best year in a long time, the last few months of the year saw a really slow market. Thanks for sticking with me this far because I am sure you are wondering why this makes any difference for 2014.
Here is why: All agents use comps to determine the value of a house. If you have an agent that doesn’t ever mention looking at recent sales, then you need to find a new one……and the ones that talk in price per square foot scare me too because that is just too simplistic of an approach. Price per square foot is best for figuring out the average of a neighborhood, not for finding the value of one individual house. The problem for 2014 is going to be a house that sold in the first half of 2013 may have had multiple offers and sold for more than it should have. The ones that sold later might have sold for less than they would have this coming spring.
A similar thing happened last year about this time. When listing agents looked at comps in the spring of 2013, they were looking back to a much worse market. Many listings actually came on the market for less than they were worth. If your house had 14 offers the first day on the market, then your agent might have priced it too low, even though there were comps to support that price from before the market picked up. And did it pick up. They way I described the market last spring was like sitting on a swing as a kid and getting that first neck snapping push that sets you in motion.
What do you do then? Spend more time looking at the comps. Determine, based on list-to-sale percentage and days on market if a comp went for less than it should have. Make adjustments or don’t use it as a comp. If a comp is from the fall, maybe add a little since the spring market is always better due to more buyers in the market. It will almost be like needing to look at the comparable sales for the comparable sales to make sure they are good ones. It is going to take a little more thought and effort to price a listing where it needs to be this year is all. I’m ready for it!