How to Use Real Estate Market News for Home Valuations


One of the most significant challenges agents face is providing a fair assessment of a property’s value. The house must be priced right to get buyers to bite. Undervaluing the home could mean the sellers lose thousands of dollars. Knowing current real estate values is integral to providing the highest level of service to clients. Learn how to use real estate market news for home valuations.

Know the Difference Between Evaluations and Appraisals

An evaluation determines the market value of a property based on what a buyer will pay for it now. Valuations determine market value based on recent past transactions. To prepare an evaluation, an agent researches the sales prices of homes sold over the past six months within an approximate radius of one mile. The homes are compared based on size, location, age, and amenities to come up with a reasonable value for the house. A professional appraiser assesses the value of the home based on a series of calculations to figure out the property taxes. Evaluation is what helps agents come up with a fair listing price.

Turn on the News

Newsworthy factors influence the real estate values. Political, economic, environmental, and social factors all play a role in how much a house is worth in the current marketplace. For example, home values may plummet during a recession with a high rate of unemployment when people are unable to afford to buy a property. However, this may increase the number of people looking for rentals. Or an area with several recent storms might have damaged homes and businesses that were abandoned, lowering neighborhood property values. Understanding what’s happening in the country and world helps agents realistically assess property values and communicate effectively with clients about them.

Buyer’s or Seller’s Market

Savvy agents review the financial news to determine whether it is a buyers or seller’s market. During a buyer’s market, homes may sell for less than during a seller’s market. In a buyer’s market, an eager seller may choose to wait it out and see if the property values increase in a next year or two. Buyers can get amazing deals at this time, especially if mortgage interest rates are low. In a seller’s market, a shortage of inventory can create bidding wars, causing homes to sell at their current value or higher. Navigating these changes is essential to ensure clients are in the best possible financial situation to buy or sell.

The Rule of Supply and Demand

Beyond the state of the market, the basic rule of supply and demand applies to home valuations. Real estate market news often focuses on supply and demand to keep agents informed about pricing. When the amount of available properties is high, and the demand is low, the price of the homes is low. On the other hand, if the supply is low and the demand is high, the prices for homes go up. Agents need to determine the supply and demand in their neighborhood to accurately assess property values. Underestimating a property’s value is a disservice to the sellers. And failing to negotiate a fair price means the buyers are paying more than the property is worth.

Four Critical Factors

Four critical factors define the real estate market. First, demand reveals the number of homes wanted in an area at a particular time, and specific price, as well as how willing and able buyers are to purchase them. Second, is usability and whether the home requires repairs and renovation to occupy it. Then the ease of transfer is a factor because the property must be legally able to change hands without encumbrances. Finally, the rarity of the property determines its market value. For example, if there are a few luxury homes in a neighborhood with two dozen potential buyers, the value of the homes will increase. Experienced agents review these four factors during the valuation process of a property to make the most accurate assessment. Affiliated Better Homes and Gardens® Real Estate agents have access to innovative learning tools to help them learn how to make accurate assessments.

Collect Local Data

Some of the most valuable real estate market news is the local data that defines the current market conditions in a neighborhood. Explore the average volume of properties sold in the past six months, along with prices and appreciation rates to determine where the market is headed. Review the features of the recent properties that sold quickly to see what buyers want. And keep a finger on the pule of the social, economic, and demographic conditions that impact who can buy and sell a property. Knowing the local target market gives agents the facts to best assist their clients. Resources for agents to check include MLS, Federal Reserve System, Bureau of Labor Statistics, Census Bureau, mortgage bankers, title companies, school district, county offices, tax appraiser’s office, and Chamber of Commerce. Determine the times of the year when properties sell for the most to advise your clients on when the buy and sell. Knowledgeable agents recognize the importance of studying recent real estate market news to determine current real estate values. An agent who can accurately evaluate homes is sure to attract plenty of clients through referrals and positive word-of-mouth.

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