I’m going to go out on a limb here and define some specific points that we at Guys In The Zone use to evaluate a property. At the moment, this practice tends towards the black arts since the basis for land values in the zone went right off the cliff with the rest of the world’s economy.
Jesse over at Green Leaf Real Estate has come up with a rather interesting formula for property evaluation: take what was paid for the land and add 25% annually, and then reduce that number by 40% to get today’s market price. I find this technique to be ingenious, not so much for it’s accuracy, (that would be a subject of much debate), but due to the fact that Jesse actually came up with a method for evaluating land that sounds like it’ll put you somewhere in the ballpark.
The problem is, we’re not sure where the ballpark is these days.
Rod & I have been working more with the other real estate agencies in The Zone as we move towards a more cooperative real estate profession. John Wieland of Coldwell Banker invited us out to look at a couple of houses in Ojochal and we got to listen to how he addressed the question “what’s my house worth?”. He answered: “you can follow the market, be right at the market, or lead the market”. To “follow the market” would be to realize that others have dropped their price and so you follow suit. “Be at the market” would be to stay in the trajectory, up or down, that you feel the market is in. Now, to “lead the market” means that you anticipate the market and blaze a trail with new prices that are compelling to the type of buyers that we now are seeing here in the zone. In today’s “down” market, this means doing extraordinarily low pricing to get a timely sale.