How much is your house worth? Here’s how to check

Over the past five years, the U.S. housing market has gained a whopping $20 trillion. That’s a 57% jump from 2020 levels to $55 trillion!

Of course, this massive uptick is not reflected in the same way across the country. Some areas continue to dominate demand over others, leading to a disparity in property prices among cities. For instance, the median price of a single-family house in San Jose, California (the most expensive in America) amounts to $1,626,041. In Portland, Oregon, it’s around one-third of San Jose’s value at $561,853 (although this figure is still well above that of 85% of the largest metro areas in the United States, according to SmartAsset).

Apart from macroeconomic factors (like inflation and interest rates), there’s a lot that could cause your home value to go up over a period of time. If you’re planning to list your house, refinance it, or take a home equity loan, understanding your property’s true worth is important to make the best of any equity gains. (It will be useful to know even when assessing property taxes or renewing your home insurance.)

Want to find out your home’s value? Use these techniques

So, what’s the best way to determine the current market value of your house? The answer depends on a number of things, including the purpose of your inquiry.

Here are five effective methods that could help gauge an estimate.

Review online real estate marketplaces

Platforms like Redfin, Zillow, and Realtor.com have taken the traditional listing process online, allowing buyers and sellers to connect on their marketplaces.

These are excellent resources for your initial research. All you need to do is identify comparable properties that were recently sold—i.e., those from your area and with a similar number of rooms, square footage, history, condition, features, and the like—and check their selling prices.

If you are unable to find properties sold in the past few months, focus on those currently listed. But keep in mind that they would usually display a higher price than the intended sale price, leaving some room for negotiations.

Use FHFA’s House Price Index

The Federal Housing Finance Agency has a massive collection of single-family home value data, dating back to the mid-1970s and covering more than 400 cities across all 50 U.S. states.

Its House Price Index measures changes in the average price of a property based on repeat sales or refinancings, helping you understand the price trends in various areas. The extensive data samples the FHFA uses allow it to provide a more accurate picture of price movements to determine your property’s value appreciation.

However, note that this index is based on single-family homes, and it’s designed to offer an overall indication of property values in a specific geographic area.

Find an online home value estimation tool

Today, there are lots of online tools available to get an estimate of your property’s market worth. These are mostly provided for free by real estate-related service providers, such as online marketplaces and lenders (like Realtor.com’s RealValue^TM tool and Chase Bank’s Home Value Estimator).

To use them, you will need to enter your address and provide a few other details (say, the number of rooms, etc.). Once you do that, an estimate of the property value will be generated within a few seconds using automated models.

However, the value range can vary between different tools based on the data and analytical models they use. So, it is best to select a few popular valuation tools and compare the results for a more accurate estimate.

Ask your real estate agent for a CMA

CMA stands for comparative market analysis. It is an estimate prepared for a house by real estate agents based on comparable properties recently sold.

A CMA could get you a more realistic perspective of your home’s value since it takes into account not just market data but also your property’s size, features, condition, upgrades, location, curb appeal, and a variety of factors that could influence the market price.

To develop a CMA, the real estate agent must visit your home and inspect it first. So, in most cases, they may charge a fee for their time. However, if they feel you are serious about listing your house with them, they will likely offer the CMA for free in order to secure your business.

Get a formal appraisal done

This is the most accurate and comprehensive method to determine your home’s value. But it’s also quite expensive (the cost is usually around $300-$750 and is influenced by things like the location, property size, condition, etc.). So, reserve this option for high-stakes decisions, like selling or refinancing.

To get an appraisal, you’ll need to hire a licensed appraiser, who will schedule a home inspection and conduct market research on comparable properties, market condition, trends, etc., before preparing a formal document detailing their findings.

The report will outline the fair market value of your property and how it was derived, together with other useful information, such as the market condition in the local area.

Check your property’s worth: Wrapping up

You may need to gauge your home’s market value in various instances, like when refinancing the property or listing it for sale. Depending on the level of accuracy and the amount of information you need, there are several ways to get an idea about the current worth of a house.

Checking comparable properties on real estate marketplaces is usually the first step for understanding market rates. The FHFA’s House Price Index and online home value estimation tools can also help you get a ballpark value for free.

If you prefer a more accurate estimate, a real estate agent could provide a comparative market analysis. Another, more comprehensive (and also costlier) option is getting a formal appraisal.

But what if the estimation is below your expectations? You can always increase your property’s value by identifying areas that could make it more attractive to buyers. For instance, consider landscaping, repainting with a modern color scheme, and updating the floors, kitchen, and bathrooms.

Property prices can also fluctuate significantly in response to market demand. More interest from buyers could naturally drive up prices. So, if you are planning to sell, you might want to wait till the prices pick up and create a seller’s market.

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