[Bonanza]

Originally Posted by JB in TV

With all due respect, I beg to differ with you. The "market value" of a property is determined by many factors, only one of those factors is closed sales. Another factor is what a capable and willing buyer is willing to pay for said property.

In a rapidly increasing market, the price of prior sales is not a true indication of a properties values, and in a rapidly declining market the same applies. Appraisers have a difficult time justifying the value of a particular property in either of these conditions.

You are right when you say that the market does not depend upon what a buyer can afford, of course... however I suspect that the poster who mentiond that really meant "what a capable and willing buyer is willing to pay"

To clarify -- I was not speaking about a single property when I referred to market value. You will note that I said "closed sales" (plural).

When all the factors have been taken into consideration (square footage, updates, landscaping, obsolete factors, number of bathrooms & bedrooms, area etc.) an appraiser or Realtor can get an average and then apply a price range for an individual property, regardless of an up or down market.

We haven't seen a rapidly up or down market in a number of years, but in a case such as that, lenders, appraisers and savvy Realtors will adjust the time frame of sold/closed properties to reflect the changing market.