Comparative Market Analysis for Homeowners
The housing market can be a complicated and competitive thing, and for any homeowner new to the market, it can be easy to become overwhelmed or confused, or even taken advantage of. Fortunately, there are services to help homeowners who have their homes on the market, and a whole industry to help them out. A comparative market analysis, sometimes shortened to CMA, is a very useful industry for helping those who need to sell their homes quickly and for a good price on the market. Real estate software, a cloud stream, and more can be used for a comparative market analysis job. How well can this service work? And what does the housing market look like today? As in, in what context is a comparative market analysis working?
The Housing Market
Overall, home ownership is on the decline, with home ownership reaching its lowest point in the United States in 50 years as of the year 2016, although plenty of people young and old continue to buy and sell homes as they always have. In fact, suburban communities will face a lot of growth; over the next decade, it is predicted that 80% of residential growth will take place in suburbs. Ever since the 2008 crash, the housing market has recovered somewhat, and the median home price has risen 16.9% from $177,000 in the year 2008 to $207,000 in 2017. And all together, all homes in the United States haev a total value of $31.8 trillion, meaning that a lot of value is being exchanged every day on the housing market, and without a comparative market analysis, a homeowner may have trouble selling a home for good price, or at all. Those of the Millenial generation, despite some claims to the contrary, are enthusiastic home buyers when they can manage the finances for it, and they make up a bigger and bigger percentage of home buyers and home owners in the coming years. They often use YouTube as a means to studying the housing market and its available properties, with this service being popular among those aged 18-49. Even cable networks usually cannot keep up with the popularity of Internet video sharing.
CMA Tools and CMA Reports
According to Nolo, a comparative market analysis is essentially a report that’s typically compiled by a real estate professional, and this report will be completed right before a property is placed on the market. The CMA will give the homeowner information such as data on nearby houses of a similar size and location, and how those homes are performing on the market (sold, priced too high and expired, and so on). In a more stable market, this report’s information will go back about six months, and in a transitioning market, the report will probably go back about three months instead.
A good CMA will tell the homeowner up to date information such as the discrepancy between what similar houses are selling for vs their list prices, what their final selling prices are, and how long it takes them to finally sell. Paying the most attention to pending sales rather than final or canceled ones is best, since they are more recent. Various websites can generate this information, whether or not the homeowner enlists the aid of a real estate agent. At some websites, for example, the owner may get a one-time appraisal emulation report, and similar properties that have already been sold in the owner’s neighborhood will be shown. Other websites may give an estimate of a home’s value, but these sites are more bare bones and may not be able to account for the home’s features, nor compare its value to up to date information on other houses. And a more approximate way to carry out this work is to attend an open house event, where a person can see what factors may increase or decrease a home’s value, and in a developed area where the homes are similar to yours, this can make the estimates and comparisons more accurate. Thinking like a buyer and looking over amenities such as fireplaces and patios can also help.