You see it all the time, especially in this market. Social media ads saying "click here to find out what your home is worth!" We admit, we run one or three of those ourselves. 😬
But with this market, it's not so much about "what your home is worth", rather..."what you can get for your home." Yes, there is a difference.
Let's look at my neighborhood of West Belmar. I recently met with a homeowner and discussed their value. Quick look around, then comes the moment of truth, what is the home worth? $489,000 to $499,000 area. I could see that wasn't the news the wanted. I quickly chimed in...but what can I get you for your home? $519,000-$529,000. Their eyes lit up. So, what gives? Why the different set of numbers?
First thing, and we have talked about this, is that appraisals are generally the value setter behind home sales. The appraised value is pretty much what your home is "worth", because an appraiser can justify the sale price off of other comparable home sales in the past 6 months. But this isn't a time of comparable sales, this is a time where trails are being blazed. This is a time where values are being set. We are making history...in a squint your eyes from a distance kind of way.
So, when I went over to our neighbors house last week, there were literally zero active listings in West Belmar. With a high demand for housing, guess how much that affects value? Tremendously. This is the principle of "what I can get you for your home." Quite simply, the best qualified buyers who need to move now will set the pace, and pay over the current value in order to have a place to call home. Let's take for argument's sake we get $529,000 for a 4 bedroom 3 bathroom home in West Belmar, that sale is now someone else's comparable sale for their future appraisal, and sets the standard for comparable homes.
This is one of the unintended benefits of the super low inventory in this current housing market. So, if you are looking to sell your home, take a look around the neighborhood and ask yourself a couple key questions.
•How many homes have sold in the past 3 months?
•How many are currently under contract?
•How many days were they on the market before going under contract?
And the most important...
How many homes are currently on the market?
None? One? Two? You may very well be in a situation where it's not about what your home is worth, but taking advantage of historically low inventory....it's more about what you can get for it.
Got a question? We are always here to help. Give us a shout any time! See ya next week!