Want to know how to calculate overall market value in Houston? Whether you’re planning to buy or sell, knowing how to find the market value of a home is important before you make any decisions.
In this post, our team at Your Home Sold Guaranteed Realty - Chris Schmidt Team will discuss the different types of valuations, how to calculate overall market value, and the current market value of homes in Houston.
Key Takeaways:
- When it comes to the overall market value of your home, it’s important to understand the difference between market value, appraised value, and assessed value.
- Overall market value is more dynamic and may or may not align with the appraised or assessed value. That’s because it depends more on what market conditions are like and how those conditions impact buyers’ decisions.
- Deciding which way to calculate overall market value can depend on the specific property type, the reason for the valuation, local market conditions, and the availability of data.
How Do You Calculate Overall Market Value?
Understanding Different Types of Value
When it comes to the overall market value of your home, it’s important to understand the difference between market value, appraised value, and assessed value.
- Market Value: The amount a buyer is willing to pay and a seller is willing to accept under normal conditions in an open and competitive market. Market value is usually determined by realtors by analyzing market conditions and the prices of similar properties recently sold in the area.
- Appraised Value: The value determined by a professional appraiser during the mortgage lending process. Appraisers evaluate a home based on criteria such as location, condition, improvements, and recent sales of comparable homes.
- Assessed Value: Used primarily for property tax purposes and is determined by the municipal property assessor’s office. It reflects the value of the property according to local government assessments, which are used to calculate property taxes.
All these forms of valuation aim to reflect the true value of a property. However, overall market value is more dynamic and may or may not align with the appraised or assessed value. That’s because it depends more on what market conditions are like and how those conditions impact buyers’ decisions.
In a buyer’s market, the market value of your home may be lower than expected, while in a seller’s market, it may be higher.
5 Ways to Calculate Overall Market Value
To calculate the overall market value of a home, you can use several different methods:
- Comparative Market Analysis (CMA): This method involves comparing your property to similar properties that have recently sold in the same area. These comparable properties, or “comps,” are adjusted for differences such as size, condition, location, and features to estimate the home’s market value. Real estate agents typically perform this analysis because they have access to more in-depth information.
- Cost Approach: The cost approach is often used for new properties and involves calculating how much it would cost to replace the property if it were destroyed. This method adds the land value to the current cost of constructing a similar building and then subtracts any depreciation.
- Income Approach: Primarily used for investment or rental properties, the income approach values a property based on the revenue-generating potential it holds.
- Automated Valuation Models (AVMs): These estimates are determined by algorithms and are used by websites like Zillow and Redfin. AVMs analyze data from various sources, but they can’t account for unique features or recent changes that could impact a property’s value.
- Professional Appraisal: Appraisals aren’t just used during the mortgage process– you can hire a professional appraiser at any time. Appraisers use detailed methods to provide a highly accurate and personalized estimate of your home’s value.
Deciding which way to calculate overall market value can depend on the specific property type, the reason for the valuation, local market conditions, and the availability of data. You could also use multiple methods to get a more accurate value.
What is the Market Value of Homes in Houston?
In recent months, homes in Houston sold for a median price of $335,000, which is a 5.7% increase compared to the same time last year. Most homes sell for 3% below their original asking price, while the hottest homes sell for their exact original listing price.
Homes in Houston have a sale-to-list price ratio of 97.1% and 14.2% of homes sell above their original asking price. In addition, 25.6% of homes drop their asking price at some point after being listed.
Work with Chris Schmidt to Find Overall Market Value in Houston
A Houston realtor is essential for determining accurate market value. At Your Home Sold Guaranteed Realty - Chris Schmidt Team Chris Schmidt and our team have years of experience working in the Houston metropolitan area.
Our familiarity with the local market trends, as well as our legendary customer service, are why we’ve developed a reputation as the best realtor in Houston. We can easily help you determine the market value of a home in Houston, whether you’re buying, selling, or are a current homeowner.
To learn more about working with our team, give us a call at 713-322-5604. You can also fill out the form on this page or send a message to [javascript protected email address].
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