Have you heard the term “comparative market analysis”? If you are working currently with a real estate broker you know this is a qualified essential tool that provides sellers and buyers a thorough value estimate.
A Denver Post article printed in May of 2022 proclaimed, “Metro Denver the second most competitive housing market in country after Bay Area with seven in 10 homes sold for above list price in April as buyers pay ever bigger premiums despite higher interest rates.” Now, that’s impressive! And the trend continues.
Key Takeaways published by Investopedia are:
Key Takaways From Investopedia
- A comparative market analysis (CMA) is an estimate of a home’s price used to help sellers set listing prices and help buyers make competitive offers.
- The analysis considers the location, age, size, construction, style, condition, and other factors for the property and comparables.
- If you’re a buyer or seller interested in a CMA for a specific property, ask a local real estate agent or broker for help, or do your own research by comparing homes online.
Is a Comparative Market Analysis an Appraisal?
A comparative market analysis will put the property within its fair price range. Lenders or real estate experts do not consider it to be an accurate a method to replace an appraisal by a licensed and certified appraiser.
A CMA uses housing market indicators to compare and identify regional home values. This is a valuable tool, and a complex process, completed by real estate professionals to estimate the fair market value picture that takes into account the goals of seller or buyer that impacts a property worth.
Property appraisals are conducted by licensed appraisers to create home valuations for the mortgage industry. In a rapidly changing neighborhood, housing prices can fluctuate dramatically and in order to get financing a home appraisal is necessary to determine if that price is justified.
The October 2022 Market Statistic Report from South Denver Metro Realtor Association follows:
DMAR Market Trends Report October 2022
It is very informational as Ed & Kathy Boyle co-owners of Katchen Company Real Estate, talk about the process of a comparative market analysis (CMA) that is used in determining the value of a home. And as always, reach out to them with questions or topic requests.