Atlanta Real Estate Blog - Premier Atlanta Real Estate

How to Determine Price Change as a Percentage

We here on the news or overhear from a real estate agent that "prices are up (or down) by some percent this year so it's "a great time to buy" or some other use of the percent change as it relates to some real estate statistic. What does it mean? How is that computed? Does it matter to me what happens to prices nationally when I want to buy a home in Atlanta or some other area?

If you are an agent and you work with clients, you can probably find some article that states these changes for you to quote. However, the real power of using percent change with your clients is when you are able to whip up these statistics in a much more meaningful way. If you are a buyer or seller, you better have an agent who knows how to whip these statistics up for you because it really doesn't matter what is happening overall in Atlanta or even in one of the suburbs like Alpharetta. They need to be able to tell you what is happening to comparable properties. That's where it really matters and those statistics are too in the weeds to find quoted my our professional organizations or even by local media. In any event, here is how you do it and why it is so powerful.

If you are a buyer or agent representing a buyer (works the same for sellers too) and you want to place an offer or list a home and one sold right down the street exactly the same as this one but it sold three months ago, how do you come up with a price for the home? Are prices rising or falling? By how much? Don't worry, it's not that hard to figure out. You just need to remember one simple phrase:

[New (Price) - Old (Price)] Divided by Old(Price) = Change

A little easier: new minus old divided by old

Let's take an example...

In some area, the average price for homes in June of last year was $325,000. This year...