What is a "Real Home Value"?
"Real Home Value" is a home's true worth influenced by cost factors such as lumber, roofing, interior accents, as well as other home specific factors such as location, square footage, and lot size. Both short-term and long-term "real" home value is affected by these factors while "market" value is not. The cost of lumber, roofing and interiors increase over time, as a result, so do "real" home values. Market values can often be influenced by an emotional buyer or seller. RHV's algorithm calculates the "real" and fair price of a home, similar to how a blue book value estimates the value of a used car.
Lumber: One of the largest components that makes up the "real value" of a home is the cost of the lumber. As shown in the graph below, there are large price fluctuations but overall the trend shows lumber costs go up over time.
Roofing Materials: Another major cost component in the "real value" of a home is roofing material. The graph below shows a continuously increasing price over time.
Interiors: Similar to roofing, interior accents (such as appliances, window treatments, flooring, etc.) show increasing costs over time.
How is RHV useful?
Wouldn't it be reassuring to know the "real" value of a home before deciding to make such a large financial commitment or when deciding to sell? Just by answering a few questions about a property, you can find out if a home is under-valued or over-valued relative to the market value (asking price).
For example: The asking price of a home is $230,000 and the "real" value is $250,000. If you are the buyer it is a good purchase since the home is worth more than the asking price. If you are the seller it is not a good decision to sell since you would be receiving $20,000 less than it's "real" value. If, on the other hand you are a seller, you know that your asking price is too low.
Whether you are a first time home buyer or a seasoned professional, the key question to ask yourself before making a purchase, "What is this home really worth?". As many home buyers have discovered since the housing market boom ended in 2005, their homes are not worth what they paid for them. In some cases, their homes are worth 30-50% less now than when they purchased. RHV's property profile will provide you with a "real value" as compared to a "market value" so you can buy, sell or refinance with confidence!
Well what are you waiting for? Enter your property zip code and see how "market values" of homes in your area are currently trending relative to "real values". You may be surprised by what you discover!
We endeavor to educate consumers and professionals about "real" home values so they can make the informed decisions about their real estate investments.
Who are We
myREALHOMEVALUE.COM (RHV) was created to help people understand the short and long term "real" value of a home as compared to its current "market" value. Our founder, Rob Irvine, Jr. developed the concept of RHV after having a conversation with one of his clients, who asked, "What is my home really worth?". He decided to create RHV to assist home owners and other real estate professionals in understanding the "real" value of a home so they can buy, sell and invest with confidence.
Founder - Robert Irvine, Jr.
Rob is the owner of Go Green Properties, LLC, a property holding company that owns and manages numerous single-family residences since 2001. Holder of an M.B.A, Rob began his investment career in the stock market in 1995 and with over 15 years of construction procurement experience, later broadened his financial interests to real estate.
Rob is also the founder and author of Visions of Wealth, a yearly financial newsletter that has been educating readers about portfolio investments since 1998. Rob has provided financial investment advice to over 200 private clients since 1995.
Why is RHV necessary for home buyers and sellers?
While there are many tools on the internet that can estimate the current market value of your home, there are not any that tell you the “real” value of your home. Moreover, there are few tools to forecast the long-term real value of a home. We can forecast what the real value of a home should be in 3 years, 5 years or even 10 years. Market prices fluctuate with emotions of the demand between buyers and sellers, which can drive market values higher or lower than a home’s “real” value. So if a buyer or seller knew the “real” value of a home at any point in time relative to the market value, they would be able to make better decisions on when to buy or sell their home. So the driving necessity of RHV is to ensure buyers or sellers can make better financial decisions.
What is a home’s real value?
A home’s “real” value is what it is really worth at any point in time regardless of market fluctuations between the supply and demand caused by buyers and sellers. Similar to the “blue book” price of a used car, every home has a true value that represents what the price should be for a particular property. Homes are built with commodities such as lumber, steel, copper, concrete, glass, etc., and the cost of these materials increase year after year, as a result, so will the value of your home.
How is "real" home value calculated?
Real home value is calculated based on a proprietary formula that pulls data from the 43,000 zip codes throughout the US. This data, along with the responses to 12 quality factors, is utilized to calculate the “real” value of your home.
How accurate is the RHV?
The accuracy of RHV will fluctuate depending on the number of bedrooms in the home. The formula is designed to provide accuracy within ± 5% for 3 bedroom homes, ± 5.6% for 2 or 4 bedroom homes and ± 6.3% for 5 bedroom homes. The data is most accurate for 3 bedrooms since this makes up the majority (54%) of all homes in the U.S.
Is RHV a better tool for use by buyers or sellers?
Actually, the concept is designed to help both buyers and sellers. It helps a buyer to make the best possible purchasing decision by understanding what the long term value of a home is relative to the current market price. On the other hand, it allows a seller to understand the long term value of their home relative to current market price. A seller, in knowing the real value, can figure out when is the best time to sell his home. For example, in 2005-2006 many homeowners could have used RHV to help them avoid over paying for their property. Homes during this time were 30-60% overvalued relative to "real" home value. The formula is a useful tool for both buyers and sellers since buyers can purchase homes when market values are lower than real values and sellers can profit when market values are higher than real values.
Can RHV be calculated for any home?
RHV is designed for 2-5 bedroom homes with lot sizes smaller than ½ an acre. If the property does not fall within these parameters, please contact us at firstname.lastname@example.org or 503.858.8460 and we will provide a professional consultation to determine the real home value.
How often is the data updated for RHV?
The data is currently updated on a quarterly basis or as data becomes available.
Are the 12 quality factors for RHV calculations that important in determining my home value?
Yes, these questions are very important in determining the “real” home value! Your choices for walkability, lot size, quality of schools, etc. can affect the final calculation dramatically. How you answer the 12 quality factors is very critical to the overall outcome. As a side note, you can also answer the questions differently to see what the difference would be in your neighborhood if you decided to add another bedroom or improve the landscaping of the home. RHV can be used as a “what if" tool for analyzing potential home improvements.
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Whether you're a current home buyer, seller, owner, or real estate professional, RHV can be a valuable tool.
Provides the current "real" value of a home you may be considering for purchase. This ensures you are buying with confidence and not paying more than you should for a property. Answers the question: "Is the current marketprice (asking price) higher or lower than the 'real' value?" Helps one to avoid over paying for a property.
Provieds the current "real" value of a home you may be considering selling. This ensures you are selling with confidence and not receiving less than you should for a property. Answers the question: "Is now a good time to sell? Is the current market value higher or lower than the 'real' value of your home?" Get the real value today or a long term 10-year forecast so you can maximize your profits when selling your home!
Considering remodeling your home? Check the "real value" today before you start your project to help ensure you are making a good financial decision.How long will it take you to recover the cost of home remodeling, or is it worth doing at all?
Real Estate Professional
Show your clients the "real" value of their home so they know when the time is right for them to sell in order to maximize their profits. Being able to compare the "real" value with the "market" value will give you the edge over other real estate professionals in acquiring the listing because you can show them how to time the market.
Knowing the "real" value of prospective client homes helps you to show the buyer how to make a reasonable offer for a home. Gain the confidence of your buyers by assisting them in making an informed decision on purchasing their dream home!