What does a "Comparative Market Analysis" (CMA) estimate?

A "Comparative Market Analysis" (CMA) is a tool utilized by real estate professionals to estimate a property's market value. It achieves this by evaluating the sale prices of similar properties, often referred to as "comps," that have recently sold in the same vicinity. This analysis takes into account factors such as location, size, age, and features of the properties being compared, allowing for a more accurate assessment of what a property may be worth in the current market.

The importance of this analysis lies in its reliance on actual data from the market, making the estimate grounded in recent trends and buyer behaviors. This empowers both sellers and buyers to make informed decisions regarding pricing. Unlike broad indicators like the total cost of homeownership, average time on the market, or potential rental income, a CMA specifically targets the valuation aspect, reflecting the fluctuating nature of real estate markets. Hence, it serves as a critical resource in determining a fair listing price or a competitive offer price for prospective buyers, ensuring that it aligns with current market conditions.