Imagine that someone told you that on average, prices in the county are up 3% from last year. What does that mean for the price of the home that you want to sell?
Relatively little.
Supply and Demand
In real estate, a house is worth what a buyer is willing to pay for it, and the laws of supply and demand apply. If 5 bedroom homes with garages are what some buyers want, and there are not many for sale, it’s reasonable to expect that 5 bedroom homes with garages will sell more quickly, and likely increase in price more than less popular configurations.
Similarly, if your home is in a part of town that attracts people looking for smaller homes, your large home may take longer to sell, and may not have gone up in value as much as you think.
New Homes
New home building can also skew averages. Let’s say that the average sold price in your area was $350,000 last year, and $385,000 this year, an increase of 10%. Did your home value increase by 10% in the past year? What if a large number of $500,000 new homes were sold in that period?
Averages can be useful when talking about larger geographic areas, but aren’t always helpful when looking at how to price your home.
In establishing the value of your home for a real estate transaction, supply of similar homes, historical trends, unique features, buyer demand, and many other factors need to be considered. Terry A on 30A looks at pricing from at least 6 unique perspectives prior to making a recommendation.
Don’t leave the pricing of your most important asset to the average. Contact us if you’re thinking of listing your home.