Can you Use Home Comps from Another City

Local

Ryan Lundquist, local Sacramento appraiser and appraisal blogger evaluates using comps from another city.

Can you use comps from a different city? Most of the time that’s a bad idea, but sometimes it’s the best option. Let talk about this a bit as I share an example of why I did this recently in an appraisal. The discussion below really has to do with school district boundaries too. Anything to add? I’d love to hear your take.

 The situation: I appraised a duplex (two attached units) in the city of Citrus Heights in an area that was just a few streets away from Fair Oaks. As locals know, Fair Oaks tends to sell at higher levels compared to Citrus Heights, so pulling “comps” from Fair Oaks could quickly inflate value if I’m not careful. But this portion of Citrus Heights is located in Bella Vista High School territory, which is a top-rated school. The school boundaries include the eastern portion of Fair Oaks, Orangevale, and a small portion of Citrus Heights where the subject property is located. Does this matter for value? Is it going to be okay to use comps from a different zip code or city? Let’s take a look.

Here are all duplex sales in Citrus Heights over the past 10 years:

Click here for full article and pics

 Now let’s compare duplex sales in Citrus Heights with duplex sales in Bella Vista High School territory to see if there might be a price difference. As you can see, Bella Vista has a much higher school rating on GreatSchools.org compared to surrounding schools.