Comparing Property Values (for sale, real estate, first time home buyer)

[roger_paul]

I'm considering purchasing a newly renovated home located in a relatively quiet middle class neighborhood in South Jersey. A quick search in the popular home/property value comparison websites revealed that the house is surrounded by homes priced dramatically lower. Some homes are even less than half the asking price. Granted, these homes are not new, but still, located right next door. Seems I will own the most expensive property in the surrounding area. There is a huge discrepancy in price.

Should I worry about this? Is my investment less likely to hold up? I'm planning on living in this house for at least 5-7 years.

Does anyone have sound advice for me? What should I do?

[JERSEY MAN]

Originally Posted by roger_paul

I'm considering purchasing a newly renovated home located in a relatively quiet middle class neighborhood in South Jersey. A quick search in the popular home/property value comparison websites revealed that the house is surrounded by homes priced dramatically lower. Some homes are even less than half the asking price. Granted, these homes are not new, but still, located right next door. Seems I will own the most expensive property in the surrounding area. There is a huge discrepancy in price.

Should I worry about this? Is my investment less likely to hold up? I'm planning on living in this house for at least 5-7 years.

Does anyone have sound advice for me? What should I do?

Roger, There is an old saying when it comes to real estate/ It's better to have the smallest and least expensive house in the neighborhood, than the largest and most expensive house in the neighborhood, sorry.

[roger_paul]

Originally Posted by JERSEY MAN

Roger, There is an old saying when it comes to real estate/ It's better to have the smallest and least expensive house in the neighborhood, than the largest and most expensive house in the neighborhood, sorry.

That's exactly it. The home I'm interested in is not huge at all by today's NJ standards. It's 1500sq feet and sits on .11 acres. I'm not saying I want the most expensive home on the block (but it turns out that in this area, this home is priced way above the other homes), and I'm worried if I'm making a good decision in buying it. As a matter of fact, other homes in the area even seem to have more property around them. It just so happens that the home I'm interested is newer. I never said it was the biggest in size.

I appreciate the old saying though, I like it. Also, I'm a first time home buyer, I've never owned property and I'm trying to be cautious. Don't know if that helps explaining my situation.

Thanks in advance.

[JERSEY MAN]

Roger, it's your choice, Ive bought 5 homes in my lifetime. Just look around, there are for sale signs everywhere. It is definitely a BUYERS MARKET. If you like it and want it, buy it. Just don't get caught up in the hype because people are having a difficult time selling now. Good luck either way.

[emanon]

Roger, I can see that you are a little hung up on the "newer" is better aspect of buying. New is better when it comes to buying cars. Newer is not necessarily better when it comes to houses.Yes newer kitchens and baths are nicer looking. But older homes are usually constructed with better materials(roofs being an exception but easily replaced).The most important part about buying is location, a crummy house in a good location can be improved but a fantastic house in a crummy location will only go down in value.The house you are thinking about seems to be the latter.

E

[roger_paul]

I'm definitely not hung up on buying a new home. It just so happens that the property I'm looking at now is newer than the homes surrounding it and is listed at a price that's way higher than the rest of homes in that area. This worries me... not the fact that the home is newer.

Thanks for your response.

[BobKovacs]

Let's put it this way- the appraiser will adjust the value of older comps in the area to compare them to your newer house, but he/she is certainly not going to double the value just because the house is new. So, if the other houses in the area are approximately the same size, # of beds/baths, etc., as yours, I think you'd have a hard time getting an appraisal for 2x their value just because your home is brand new.

Is this the same "new house on an old foundation" from the other post?

[roger_paul]

Originally Posted by BobKovacs

Is this the same "new house on an old foundation" from the other post?

Yes. It's the same one. I'm trying to do my homework about that one.

Here's what a query from zillow gives me. I've blurred the streets.

[BobKovacs]

Well, if you're talking about Zillow "assessed" values, that's a different story- those are pretty much meaningless for anything other than figuring out what your property taxes will be.

You need to compare the purchase price for this house to what other houses in the area have sold for- not what they're assessed at- the assessed values typically have no correllation to the sales price/worth of the home.

[emanon]

Originally Posted by roger_paul

Yes. It's the same one. I'm trying to do my homework about that one.

Here's what a query from zillow gives me. I've blurred the streets.

This house is clearly overpriced for the neighborhood. If you buy this home I predict a very expensive lesson.
But hey it's your money.

Good luck,
E