sdrealtor, correct, but, demand is LOW and SUPPLY is high. As a buyer, wouldn’t you want to know the going price of the LAND and the HOUSE ? Here in S.Calif most of the value is in the land, not a crappy 50-60 year old house. And most figures thrown around the real estate industry are $/sq ft of the HOUSE. If you can figure out HOW MUCH per sq/ft HOUSES are selling for AND HOW MUCH per sq/ft LAND is selling for, then you can add them together to get a GOOD idea of how a property is (PRICED) at a given time. NOT, how much a person may pay (Value). In a declining market such as this, it is best to know HOW WELL property is PRICED. OF course supply and demand is what drives the market, but it doesn’t inform a buyer to how much a house is worth in an arms-length transaction. I applied this formula to two houses on Pier Avenue in Santa Monica, same block, lot, living space and realized one sale that closed within 3 weeks of another was OVERPRICED by just under $100,000. They’re more than screwed now.
Perhaps you should actually try the formula, before you judge it.
