So, I received a phone call recently from a lady asking me to do CMA (comparative market analysis) because she wanted to find out the value of her home. As any Realtor would do, I've looked up the comps of what has sold in the neighborhood in the last 90 days. Surely, there were few foreclosures that went for $230,000 -$250,000 for the same floorplan. Once I called the lady back and told her that he home was worth about $230,000-$250,000 in today's market she practically told me that I was out of my mind.
NOW the question is: where is the logic??????? Her reaction: "We bought this house in 2003 for $355,000! We were selling it in 2007 for $615,000! That's impossible!" So what? Did it sell in 2007 for $615k? NO, it did not....you know why??? In case you missed the recent news, the housing market was ballooned and recently crashed. In case you missed that part and are not aware of the current situation - the foreclosed properties (and some short sales) drive the market values.
A market value is NOT what you paid in .... year, it is NOT what you are wishing to obtain, it is NOT what your neighbor/relative/mom/dad is assuming it to be, it IS what a willing buyer would pay in a competitive market. Therefore, a market value fluctuates depending on the amount of sellers & buyers, current inventory and its pricing. OF course, there are many more factors involved but ultimately this is what drives any market.
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