The question of how much you get for a certain price is always an interesting one. First of all, we have all heard the saying that real estate is local. Nothing could be more true. When you are comparing real estate, you really do need to compare apples to apples and oranges to oranges. For example, it makes no sense to compare a $400,000 home in Billings, Montana to a similarly priced home in Los Angles. The markets are totally different.

Taking that one step further, you can’t even compare homes in the same city or even in the same corner of the city. You basically have to drill down to each individual neighborhood to get an accurate comparison. Then you need to consider whether or not the streets are comparable since a home on a busy street will get a lower price than a home in a nice quiet cul de sac. Next, is the home a bungalow, 2 story, split level or any other configuration? You can’t really compare a bungalow to a two story since the two story will typically give you more square footage, while the bungalow is usually more expensive per square foot. Is one of the homes a new build while the other is 30 years old? What are the homes backing onto? If one home backs on to a nice park or green space while the other backs on to several neighbors creating a “fishbowl” feel, then you have to give the home that is on the park at least 5% move value to compensate.

Another thing that will impact the value of a home is the motivation of the buyer or buyers. If you are in a hot market, you could see multiple offers on a good home. In that case the price of a home may seem inflated, but in reality the home is selling for market price because the market price is whatever someone is willing to pay for it. It is the same in the case where a market is depressed and a home owner is desperate to sell and they have to accept a lower than expected price. In extreme examples you can exclude the outlier prices if they are dramatically lower because the home was a drug house or some other negative thing happened there.

There are many other variables to take into consideration when comparing homes, but you get the point. So, how much do you get for $400,000 in Los Angles? I will let you watch this video that explains this further.