Comparative Market Analysis Done Right


Real estate is a large industry and market in the United States today, since everyone needs somewhere to live. Some Americans and their families choose to rent their living space, such as young adults who can’t yet afford a house or those who move often due to their job or lifestyle. Meanwhile, older and more financially-capable adults often find a property to purchase, and invest in that real estate. It is a complex process to either buy or sell a house in the United States, but fortunately, anyone looking to buy or sell a property may turn to professionals for help and guidance. Real estate agents may lend their assistance to home buyers and sellers alike, and they can offer their expert advice and experience as well as CMA, or comparative market analysis. CMA reports are made with CMA software, and comparative market analysis can do a lot of good for someone looking to buy or sell a property. Just what is comparative market analysis, and what are some general strategies for buying or selling such a property?

The Market

One may first consider the market as a whole and its recent trends. It is well known that the housing market suffered greatly in the 2008 recession, but it has largely recovered, and the median home price rose 16.9% from $177,000 in 2008 up to $207,000 in 2017. This market is due to continue to grow, and over the next 10 years, 80% of residential growth will take place in suburban communities. What is more, the overall value of the American housing stock grew 6.5% in 2017, and that was a growth of $2 trillion or so. All together, American residential properties are worth an estimated total value of $31.8 trillion, an impressive total.

Who is buying and selling these homes? Baby Boomers, or those born from 1945-1962, are the most capable home buyers and sellers since they have had a lot of time to save up cash for such projects. They also spend the most on home renovations such as kitchen or bathroom remodeling, since they don’t move as often as younger Americans. Thus, they invest more deeply in their current property instead. Millennials, young adults born 1982-1995, are a small but growing percentage of Americans who are buying such houses, and they are now old enough to afford such purchases more often than before. Currently, their Baby Boomer parents outspend them three to one on remodeling work, but this gap may narrow somewhat as Millennials grow older and have more robust income and savings. Gen Xers, those born 1963-1981, are somewhere in the middle, but they are a smaller generation overall than the Baby Boomers before them or the Millennials after them. No matter how old or young, however, a home seller or buyer will want the most value in their property and sell it for a fair price. This can be done with real estate CMA software.

CMA Tools

When a homeowner wants to sell their property, this homeowner may turn to real estate agents who have comparative market analysis software to share. How does this work? This comparative market analysis work involves comparing the property in question to properties of similar size and construction in their area to determine a fair selling price. This comparative market analysis may refer to similar properties that have already sold, those currently on the market, or even both, if so desired. This is a fine reference that saves the homeowner from asking for a too-high price that no one will pay, or asking for a too-low price that makes for a bad deal. This may be tricky and difficult for a homeowner to do alone, but a helpful real estate agent and other realtors can help.

A homeowner may invest further in their property before selling it. Landscaping in the front and back yards is highly efficient, and investing 5% of the property’s value in landscaping may yield a ROI (return on investment) as high as 150%. Interior remodeling for the kitchen, master bathroom, and other rooms may yield an ROI around 70-80%, and allow the homeowner to ask for a higher price and attract more buyers. This allows the property to sell faster, and for a great price.

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