Monday, January 30, 2017

Don't Be Fooled By General Reports on Housing Prices

One of the values I offer my clients is an accurate picture of the price of houses in their neighborhood and surrounding areas. I do this by using the MLS online software to find nearby comparable homes.  Homeowners can be surprised when the value of their home is higher or lower than a figure reported in the news.  It's not that the reported average home prices are false, they are just too general most of the time to apply to a specific home.  Here is an example.  Suppose you are interested in your home's value and live in a 4BR detached home in Clover Hill with about 2,200 square feet of living space.  According to the MRIS MLS, the average price of a Frederick County home in 2016 was about $308K.  Other sources of data may differ slightly.  This average price includes all home types (detached, townhouses & condos), as well as all types of transactions (standard, short sales, foreclosures, etc) and all zip codes.  If we drill down a little, the average price of a detached home for the whole county was about $356K. Big difference.  If we go further and weed out the short sales and foreclosures and only look at standard sales  for the whole county, the average price of a detached home is $377K. Going further, if we narrow down to zip code 21702, standard sales, detached homes, the average home price is $343K. One last step. Let's reduce the region to Clover Hill, standard sales, detached 4BR homes. Now the average 2016 home price is: $ 417K.

So why bother reporting the average housing prices for larger regions? It is an indicator of where values have been and where they are headed. To determine if prices are rising or falling, a regional number may be sufficient.  The same caveat applies to this though. Prices may be rising in Frederick County (2%+), they may or may not be rising in your city. Mt. Airy prices rose 4% and Taneytown dropped -4% in 2016.

Many criteria influence price. Here is a chart showing the average price differences just by ZIP code.  Urbana, zip code 21704 with it's newer and larger construction, shows the highest average prices.
If you would like an estimate of your home's value, feel free to call. I am happy to  show you how I arrived at the value.