Wednesday, March 17, 2010

How Do I Find Out if My Home Has Appreciated?

In this topsy turvy world of Real Estate, sometimes we are not sure if prices are going up or down.  One of the hardest stats to pin down is Appreciation.  How can you know if your home has increased or decreased in value?  The best way is to look at historical data over a period of a few years, then compare it to current market conditions.  If that data is public information, then you can do the analysis yourself.   In the Metropolitan Indianapolis area, that data is private information and is owned by the Metropolitan Indianapolis Board of Realtors or MIBOR.

A Realtor who is a MIBOR member can provide that information to you.  One method I have used is to calculate the average sales price for a neighborhood for each year over a 3 year period.  Then when I have those numbers I compare them to current market activity.  Is that average price point increasing or decreasing and by what %?  An absorption rate is also a helpful tool.  This calculation determines how many months' supply of homes is present.

 First see how many homes have sold in the last 6 months.  I include both "pending" and "sold" properties.  Then divide that total by 6 to arrive at the # of homes selling each month.  Finally, take the # of active homes and divide by the # selling per month.  This final number is the # of months of inventory.  5-6 months is in balance, 7+ is a buyer's market and 1-4 is a seller's market.  Certain price ranges are starting to see the inventory decrease.

Here is an example to try to make the math simpler.  20 homes sold + 4 pendings = 24.  24/6=  4 homes are selling per month           The current supply of homes is 36.  36/4= 9 months of inventory (Buyer's Market)

If this is making your head spin, give me a call or email me and I will be happy to explain and to check on sales in your area!

http://www.dreamstime.com/stock-image-golden-chart-with-red-pointer-rimagefree6899733-resi2139449

2 comments:

  1. I am your newest follower From MBC :-)

    You can find me here~
    http://debshere.blogspot.com/

    ReplyDelete
  2. Thanks Deb for your comment. It is always helpful to hear from readers!

    ReplyDelete

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