Mike’s Real Estate Show

“Comps” in this market can be extremely mis-leading. I believe a Realtor or Agent specializing in a certain neighborhood is now worth their weight in closed escrows. This is because our “Comps” are now not just limited to “What” they consist of; square footage, features, lot size, schools, etc but “HOW” they became a “Comp”. Let me explain: We have a whole different seller in today’s market just like we had a whole new type of buyer over the past 5-7 years. Our buyers, some would argue up to 40% of the market, were NOT the average home buyer of years gone by. 

They were “speculation” buyers. Even if some where actually living in the houses they bought, many owned to take advantage of the spectacular surges of home prices of 10,15,25% a year appreciation. Zoom forward to today–now we have different “Sellers” who are creating “Comps” and “competition” which is irregular and I feel, somewhat UNFAIR to the regular home seller who wishes to move up, retire, or sell and downsize. The “Short-Sale”, Foreclosures, Investor’s, New Home Builder and REO (Real Estate Owned) Sellers are “dumping” product, slashing prices, offering incredible incentives to buyers and Agents and generally skewing and skewering the general homeowner who does not have the resources of these folks.  So the “area-expert” can tell a homeowner what the “lay of the land” is in the current market for their area. Is it infested with “junk” sellers like the ones above? Or is it more stable consisting of homeowners with a minimum of “junk” influences. If you go up against the big boys you are going to loose. Also, if you’re buying and buy into a “junk” neighborhood be forewarned!! Your area is most likely to face many more “junk” sellers in the next two to three years as all the 2/28’s and 3/27’s loans start resetting with foreclosure consequences some 90-125 days out!! In conclusion, it’s not so much as “What” the comp is as “HOW” they got there!! It’s a brave new world out there!