Ardell DellaLoggia of the Rain City Guide pens one the best pieces I have seen regarding housing valuations at a hyper-local level. Entitled Home Valuation “Tools”, Ardell goes on to detail how to properly value a property and how to seperate the value of the land versus the value of the house…an important consideration, often overlooked, in expensive markets where most of the value is actually land (I am talking to you San Francisco!). Her analysis is deep so get a pencil out but the basic takeaway is that if you can determine the cost of land, and make adjustments for slight differences, you should be able to determine which houses are overpriced and which ones are underpriced. Ardell finds a home that was torn down after being purchased and so was able to get a solid market value for land. Getting everything apples to apples is critical - and not easy.
Her analysis is not only thorough, but also demonstrates that housing valuation is a highly complex problem that has variation from property to property. In other words, it is very difficult to model and so AVM’s will largely miss the nuances. Naturally we at My-Currency have built our site for this very reason - to enable the local experts to shine and to collect these nuances both in detail and as an aggregated value in our prediction technology we call CrowdValue.