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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Tradelite who wrote (16047)1/15/2004 2:03:15 PM
From: jjs_ynotRead Replies (1) of 306849
 
>>> It's the only method of valuation used for residential real estate -- by appraisers, ... <<<

That is not correct. Appraisers have at least three methods for valuing residential real estate: Market Value Approach(Comparable Sales) , Income Approach (Investment Value), and Cost Approach (Replacement Value). In periods of significant deviation of market value from the other methods it becomes dominant since the other two don't allow real estate deals to work.

HOWEVER, it has been my experience that buying when the market value approach is below the other two and not buying or selling when market value is above the other two valuations yields better return in the long run.
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