What's My Home Worth? Home Value? | Peggy Jensen - Century 21 Trident Realty
What are comps and why are they so important? Every industry has their own jargon including the real estate industry. When you decide to buy or sell a house, you will hear many words that you might not be familiar with. If you're unfamiliar with the word, "comps" is short for comparables.
What Makes a Good Comparable?
Comparables are houses that are currently on the market, under contract or recently sold. They're used to compare a house you're planning on buying or selling against others in the market. Comparables should be chosen objectively. Sometimes this can be difficult in a shifting market if there aren't many homes that have sold recently. Of course, no two houses are exactly alike either. Some similarities will probably include:
- Location and neighbourhood
- Square footage of home
- Lot size
- Similar number of beds, baths and rooms
- Condition (updates, curb appeal, presentation)
- Sold and recently closed
In a shifting market, everyone in the industry agrees that it can be difficult to pinpoint solid comparables. The Nova Scotia real estate market experienced an anomaly with all-time highs in 2022. This phase has eased up. Homes are not seeing huge amounts of multiple offers and wild above asking prices. The market has somewhat stabilized for right now. In most areas prices aren't plummeting. Since inventory has been low and continues to be, it can be difficult to find a lot of comparables within a short time period.
The Takeaway:
Sellers are hanging on to proof that their house is worth a certain amount based on sales when prices were at an all-time high. On the other hand, buyers often feel that prices should be coming down based on news of the shifting market and higher interest rates.
While comps are useful in determining values, a shifting market will present a challenge for sellers and buyers. It takes some time for data to catch up. A real estate agent will do a thorough market analysis using the most recent comparables available and be up to date on the most recent market trends in the area.
