Q. I’d like to know your opinion on using past sales as comps to submit an offer. With the quick slide downward since 2007, would it be accurate to say that 2007 sales are pretty much invalid? If there have been April/May 2009 sales for similar homes in the same area, can I take those and lower it by 20%ish to compensate for the still declining market? I want to use this info to decide whether or not I should place an offer at all.
Yes, but of course there is more to it than that:
1.) The 20% is a number but whether or not it makes sense depends on the other numbers.
2.) A recent interview with a professor at Santa Clara University discussed with NPR that the average seller over prices by 13% in a up market and 33% in a down market. So your 20% may be right on. Here is the story about on NPR. http://www.npr.org/templates/story/story.php?storyId=89225406
3.) To your point about future value, I would bracket my comment on – if you were looking for a deal you would not pay over market in a up market or down market. The point was more to say, you want to get a deal in the PRESENT market, not the future or the past. Good eye!
I think the waiting has to be weighed with interest rates and the neighborhood trends that you are looking in. Some neighborhoods will continue to drop enough to off set any rise in interest rates (within means). Others will not drop enough to off-set even a .25% change.
Happy house hunting!