Appraisals and Determining Price of Philadlephia Real Estate
I read the Article, “Deciding Home Values Now Tricky” by Al Heavens, Philadelphia Inquirer columnist which can be found here and it really hit home. This issue of appraisals and accurately determining value in Center City Philadelphia has been a hot button issue for the past few months whether you are buying, selling, appraising or a real estate agent. Appraisers were blamed for their role in the collapse of the US housing market and as a result federal laws were enacted and cultural changes within the appraisal community occurred. New laws require lenders to randomly select appraisers from a pre-approved list and assign appraisals as they come in round robin style. The appraisers are not required to work in, live in or have knowledge of the particular neighborhood in which the property is located. Within the appraisal community in general, ultra conservatism rules the day.
In Center City Philadelphia, most residential condo, row home and town home appraisals focus heavily if not exclusively on comparable sales. Obviously what is comparable is highly subjective and varies greatly between buyers, sellers, appraisers, and real estate agents. To muddy the waters further, there is no consensus regarding the use of distressed property sales like foreclosures, short sales, and bank owned properties (REO) or if they should even be used at all. That being said here is my advice on how to most accurately predict the value of a property in Center City Philadelphia in the current market. Obviously there are no promises.
How to Determine the Price of Philadelphia Real Estate:
- Use sales of properties that are comparable in terms of size, square footage, location, quality of finishes and amenities like parking, gardens, high floor etc…
- Use sales of comparable properties that have sold in the past 6 months or sooner.
- Try to use properties that are within ½ mile from the subject property and if possible try to use properties in the same neighborhood or zip code.
