Many in the real estate industry are challenging the way real estate has been valued.   Real estate like any commodity is affected by the law of supply and demand.  As the commodity becomes less scarce and the demand increases, the venders or home sellers can demand higher prices.
 
Over the years appraisers have concentrated their efforts on home sales to derive value.  The problem with this thought process is that one cannot buy a home that has already been sold. One can only purchase a home that is presently available for sale.   Therefore, does it not make more sense to derive value from the competition (homes for sale) rather than from historical sales records?
 
I had one case where the market value of a home based upon historical sales indicated a value less than $300,000.  It had a perceived value less than other homes in the neighborhood.  In a brief flurry of home sales, the competition was sold and no longer available. With the subject property being the only home remaining in the neighborhood and demand average, the subject property’s value immediately increase to over $320,000.
 
The real estate market moves continuously like a river. The market changes each time a new property is placed on the market or an existing one sells. Sellers, appraisers and real estate professionals do not determine today’s market value of a property any more than the weather person dictates the weather. 
 
The law of supply and demand determines value.   The key to successful pricing is to understand the supply and demand issues.
For homes presently for sale in the Tri-Cities, WA go to www.Tri-CityHomeBuyer.com