How Much is My Arizona Home Really Worth?
WHAT’S MY HOME WORTH?
“What’s my home worth” is the million dollar question I would love to answer for you. While the Peoria median house price in 2019 is over $360,000, how much your home is worth depends on its size, neighborhood, and lots of additional factors. Further complicating matters could be your own value perspective: We tend to mentally inflate our home’s positives and airbrush out the flaws that are all too apparent to the cold, calculating eyes of buyers.
People always seem to compare their house to the most expensive sale in the neighborhood. Instead, look at the prices of similarly sized homes that have recently sold in your area—data that agents call comparative market analysis, or “comps.” Then, price your place strategically. If you price too high, the home is likely to linger on the market and cost you more money.Here are the most important factors you’ll need to consider when valuing a home:
Historical sale prices
One of the first things real estate agents, appraisers and prospective home buyers look at is the historical sale price of the property.
If the property has been sold three times in the past three years, for $150,000, $155,000 and $153,000, it seems reasonable to start at a valuation around $150,000, and make adjustments based on any new additions or changes to the property.
Historical prices are also usually dependent on the other factors on this list.
The neighborhood is one of the biggest influencers of a home’s value, responsible for both qualitative and quantifiable aspects of a home’s appeal.
For example, school system quality and home prices tend to be strongly correlated.
Research isn’t clear whether home prices influence school system investment, or whether quality schools influence home prices, but either way, school quality significantly affects home values.
Crime rates, similarly, are negatively correlated with home values in the neighborhood.
The current state of the housing market will also influence a home’s value. Home prices are shaped by supply and demand, like any other economic asset, and may fluctuate based on subtle changes in your area’s economy.
For example, if there’s a shortage of available houses and plenty of people looking to move to your area, home prices will rise. If the overall national economy is doing well, home prices will also increase.
Size and appeal
A home’s size has a major influence on its value, with some prospective home buyers looking specifically at price per square foot to filter out this effect and determine value.
Bigger houses tend to sell for higher prices, of course. You’ll also have to consider the appeal of the house; traditional, neutral layouts tend to carry more value than obscure layouts that appeal only to niche audiences.
The more general the appeal of the home, the greater its value will be (especially considering resale value).
Age and condition
In addition to size and appeal, you’ll need to think about the home’s age and condition. Newer homes will sell for more than older homes because they’ll typically require less maintenance.
However, an older home that’s been well-maintained may sell for just as much as a newer home — condition matters.
Things like the home’s foundation, structural integrity, electrical work, plumbing and fixtures are all worth considering.
Finally, you’ll want to think about where the property is located, in relation to other accommodations and features.
For example, homes that are close to shopping locations, and ones with easy access to major highways, tend to sell for more than ones far away from everything.
The more time you spend looking at, valuing and comparing homes in your specific area of expertise, the better you’ll get at making accurate projections of a home’s potential selling price.
In many cases, it’s worth hiring a formal appraiser to provide a second opinion, or reinforce your valuation with more authority.
ADDITIONAL HOME VALUE RESOURCES
- Metro Phoenix Home Prices Are Set to Hit a New Record via Catherine Reagor
- What’s the Best Way to Determine the Value of My Property? via Ruth Lyons
- How to Determine Your Value using Real Estate Comps via Bigger Pockets Writer
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About the Author: The above article, How Much is My Arizona Home Really Worth? was written by Troy J. Elston, a licensed Realtor at West USA Realty, the premiere real estate brokerage based in Peoria Arizona. With over 16 years of experience in the real estate industry, Troy produces stunning results for home buyers and sellers. If you're thinking of BUYING or SELLING a home in the Phoenix Area, Troy would love to share his knowledge and expertise with you.
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