As we move into Fall 2015, traditionally the slow time of the year, there’s been a lot of talk about where home prices are going. One thing most Real Estate professionals can agree upon is that the Sacramento Tri-County market is having another banner year. This has continued the winning streak with increasing values since 2011 for all three counties, Placer, El Dorado and Sacramento Counties.

If you’ve been wondering what’s happening with your home’s value, we’ve put together 4 Key Home Value Indicators to help you better understand what to look at to determine if your home’s value has increased.

New Building Activity is Up in Your Neighborhood – Supply follows demand. If you’re seeing building going on around you, it’s most likely that you’re in a high-demand area. With a considerably limited amount of inventory, prices has been strongest in high-demand areas. There is little chance of overbuilding at this point, so prices will continue to increase until supply meets demand.

Neighborhoods Near You Have Gotten Spendy! – If you’re questioning how the heck your neighbors just got that much for their home, take a look! Pay attention to what comparable homes are going for in the area. The main tool that appraisers use for valuing homes is the Substitution Method. If other’s homes have gone up, most likely yours has too. The best indicators are homes that are most like yours. Look at things such as square footage, functional age, updating and improvements, lot size, pool versus no pool, quality of construction, and number of rooms.

Inventory and Time on the Market:  Low inventory drives home values. Six months of inventory is considered a balanced market with less than 6 months a seller’s market. If the inventory of available homes is in short supply, then there will be high demand. The amount of time that a home will stay on the market is reduced and the price is driven higher. If you’ve ever seen a bidding war, potential buyers keep offering more for the property, this is usually due to high demand. If a home is priced right and in high demand, it can still sell within a matter of days with multiple offers.

Real Estate Agents are Bullish – Good agents typically have a solid grasp on the local market. They watch time on the market, inventory levels, what is happening with the neighborhood, and will usually have a good idea of what the good and bad points were of properties that sold. This in-depth knowledge make them a great resource to determine where you home value might be. Not all Realtors are professionals, but the good ones are valuable. Ask a trusted Realtor what they’re seeing. They should be able to give a good idea, and even run a Comparative Market Analysis, CMA, to give you a feel for what your home is worth.

We’ve included some additional links and resources for you to get a better sense of how the market’s performing in your neighborhood. If you think you might have equity, read our next blog post and watch the video to determine what to do with it.

Resources:

Look at an example CMA
Real Estate Market data from Trendgraphix

If you have any questions or need help in meeting a good Realtor, please feel free to call or email. We’d be happy to make an introduction.