Let’s look at some components of pricing:
The concept is simple; value is defined by what a buyer would willingly pay a seller, with no undue external factors, in exchange for their commodity of real estate.
However, where it gets complicated is that each value-defining transaction occurs in a vacuum and the unique factors of the exchange (buyer, seller, and consideration) will never again be identically replicated. So real estate professionals, appraisers, tax assessors, and anyone else with a stake in the game have created metrics to help understand what the value of a particular commodity of real estate most likely would be.
It’s important to understand that distinction because, until a transaction occurs, the value of a property cannot be known, and so even the most knowledgeable REALTOR® or appraiser, will, at their very best, be able to give you their opinion of the value of a described parcel of real estate.
Ultimately, there are hundreds if not thousands of combinations of attributes that can affect the value of a home positively or negatively. Throw into the mix that these dynamics are also subject to external changing factors such as market appreciation or depreciation, interest rates, proposed developments, school districts, etc., and you start to get an idea for the inherent complexities in correctly pricing a home.