Questions About Market Value of a Home

Question: Hi Jim, Why is this house priced almost $20,000 than it's assessed for? I know they bought it on 2005 for $350,000, but at today's market it seems unrealistic. It has no garage which would have to be built! I know this is not your listing, but do you know anthing else about it? It's been on the market since November 2011 and already has been reduced, but I believe it is not enough of a reduction. Thanks so much. - Kathy
In reference to the follow property: http://www.afhomesearch.com/properties/Danvers/Wadsworth-St/2850427

 Answer: Kathy,

The assessed value of a home has no relationship to the market value of a homes. The way the town determines assessed value differs from the way a Realtor or an appraiser determines value because it is done for tax purposes. Plus, assessments are usually 2 years behind market value, and many times don't include any recent upgrades.

This particular home is actually under agreement, but they are continuing to show it for back up offers. It is a short sale, which means they are selling it for less than what the seller owes to the mortgage holder. According to public records, the seller still owes more than $300,000 to the lender. There no way of knowing what the current offer is on the property, but it is property close to the current list price.

No, it doesn't have a garage, but that doesn't matter to many people. It is in a nice neighborhood, has a good size lot, and has no neighbors in back of the property, so it is a desirable home. It is also in very good condition and shows very well, which many buyers are willing to pay a little more for. The inventory of available single family homes on the North Shore is actually quite low right now, partially due to the time of year, but also because the market is very busy. This is keeping home prices stable, and in some areas we are even seeing slight increases in value. Danvers, MA only saw a 1.45% drop in home prices in 2011, and most of that happened at the beginning of the year. Towards the end of the year the prices were starting to edge up.

I am always available to answer any questions you might have. It doesn't matter if I am the listing agent or not. Let me know if you would like to see any home on the market.

Thanks.

Jim Armstrong
Broker/President
Armstrong Field Real Estate
Mobile 978-394-6736