Pricing your Home? Do your homework.

Sometimes the statistics don't add up until you peel the onion to uncover what is going on in a particular neighborhood. I ran into this last week when I was helping a friend price her home in Waunakee. She lives in Savannah Village, a newer community that is home to some beautiful houses, most of them priced between $350,000 and $700,000. Savannah Village has 3 parks, a neighborhood pool and an elementary school, making it a popular location for growing families.

We began our homework by looking at the overall price trends for the village of Waunakee. The MLS statistics for Waunakee show that the median home price has been rising this year. In fact, the median price for a Waunakee home was up by 5.4% through the month of May.

Next, we took a closer look at the neighborhood. We started by measuring the current inventory in Savannah Village. As of last week there were 14.5 months of inventory in Savannah Village, which is about 6 months higher than the Dane County average.

We continued by reviewing comparable active listings and by analyzing recent sales in the neighborhood. Then we asked two questions which turned out to be two very good questions to ask:

1. How many of the homes that sold in 2008 had also sold in either 2007 or 2006?
2. For each of these homes, did the 2008 selling price go up or go down?

We found 4 homes that sold in 2008 that had also sold in either 2006 or 2007. Two of these homes sold for a higher price in 2008. One home sold for $8,000 more than its most recent sales price. The other sold for $5,000 more.

Of the two homes that sold for a lower price, one sold for $10,000 less in 2008, while the other sold for $30,000 less.

We found one other home that sold in 2006, which is now on the market for $28,000 less than the price it sold for two years ago. Not surprisingly, this home recently received an offer and is waiting to close.

Now that we've completed our homework, my friend has a price for her home, and she has a good understanding of just how competitive the market is in Savannah Village. She knows that she definitely needs to compete for her sale.

If you're selling your home, be sure you or your realtor take the time to do a thorough assessment of your neighborhood. If you ask good questions, and you dig for the answers, you'll come up with a realistic price that will get your home sold in this market.

For more tips, view our article on pricing your home at DaneCountyMarket.com.