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Comparable Sales One year ago, a 3,000 sq. ft. property not on the lake, with a pool sold for $300,000. This year a 3,000 sq. ft. property not on the lake, with a pool sold for $257,000. A 2,750 sq. ft. property not on the lake front, with a pool sold 1 year ago for $275,000. A 3,000 sq. ft. property, on the lake, with a pool sold for $290,000 this year. Last year a 2,750 sq. ft. property not on the lake, without a pool sold for $250,000

Comparable Sales One year ago, a 3,000 sq. ft. property not on the lake, with a pool sold for $300,000. This year a 3,000 sq. ft. property not on the lake, with a pool sold for $257,000. A 2,750 sq. ft. property not on the lake front, with a pool sold 1 year ago for $275,000. A 3,000 sq. ft. property, on the lake, with a pool sold for $290,000 this year. Last year a 2,750 sq. ft. property not on the lake, without a pool sold for $250,000

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question

What is the estimated market value of a property that 2,750 sq. ft., has a pool, and is on the lake front?

  • Comparable Sales
  1. One year ago, a 3,000 sq. ft. property not on the lake, with a pool sold for $300,000.
  2. This year a 3,000 sq. ft. property not on the lake, with a pool sold for $257,000.
  3. A 2,750 sq. ft. property not on the lake front, with a pool sold 1 year ago for $275,000.
  1. A 3,000 sq. ft. property, on the lake, with a pool sold for $290,000 this year.
  2. Last year a 2,750 sq. ft. property not on the lake, without a pool sold for $250,000
Expert Solution
Step 1

Sales comparison approach

When the data for the sales of comparable properties are available, the price of given property can be estimated by taking the average rate as shown below.

Estimated price=Total square feet of property×Per square foot average price

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