[quote=patientrenter][quote=CA renter]……How are you calculating “real value”?[/quote]
Is it the price you REALly want? I want to earn $10 million a year. But, alas, I am earning less than my real value. Seriously, No-LA-SD-guy, if you are claiming that prices in a market segment are below their long-term trend values, or something like that, then bring the data. For example, the current prices for that market segment and the trend back through at least the bottom of the last cycle (1996), or preferably through a few cycles (so back to 1980, maybe).[/quote]
OK well I will admit its just educated guess work mostly, but I would say the real value of a home (without adding more than minimum location premium) is the cost to build (including all fees, roads, schools, fire, police etc…) Plus about 7 to 10 percent.
( That is why I corrected that it is not necessarily market value but real value).
Let say your in TG’s neighborhood (just to pick one that’s easy)
If your building with any quality the structure is going to cost at least $50 to $75 a sqf (flooring alone can set you back $3 to $6 or more a sqf if it’s of any quality).
Building on a hill always cost more so add about $10 a sqf.
Add in the fees and roads etc.. and you’re over a $100 a sqf easy.
And that’s without any location premium.
I would say when you start to see at least 70% organic sales then you are getting close to real value again.
