Changing Mix of Comp’s (“Comparable Sold Properties”)
It may strike non-professionals as odd, but real estate market values are established by “looking through the rear view mirror” — that is, by scrutinizing recent, similar sales as near to the subject property as possible.
Every rule has its exceptions, but the conventions in residential real estate are: three comp’s; within one mile (or less) of the subject 
property (closer in denser, urban neighborhoods); within the last six months; and apples-to-apples “style” comparisons, i.e., rambler-to-rambler, two-story Colonial to two-story Colonial, etc.
Sales Prices Then & Now; Seasonal Sag
Given the dramatic improvement in the housing market in the last 6-8 months, even a short interval can result in a BIG difference in appraised value.
So, a homeowner who tried to refinance last February conceivably could have had their house compared to “Comp’s” that closed in September, 2012.
Given the typical 6-8 week lead time between consummating a Purchase Agreement and closing, that means the price for the Comp might have been negotiated as far back as June, 2012.
Where were prices last June?
At least in some Twin Cities neighborhoods, a LOT lower than they are now.
That’s in addition to the fact that late Fall sale prices in Minnesota typically sag, while they rebound in Spring.
February 2013 Comp’s . . .
To illustrate the outsized effect the foregoing variables have on prices, consider the following not-so-hypothetical example (for a client’s South Minneapolis home):
Comp #1: sale price — $205k; date closed: Sept, 2012
Comp #2: sale price –$270k; date closed: Nov. 2012
Comp #3: sale price — $245k; date closed: Jan, 2013
Average: $240k
. . . . & Four Months Later
Four months later, watch what happens when a new batch of more recent sales have closed (note that the $245k sale from January — still within the six month time frame as of June, 2013 — is the lone holdover).
Comp #1: sale price — $205k; date closed: Sept, 2012
Comp #2: sale price –$270k; date closed: Nov. 2012
Comp #3 #1: sale price — $245k; date closed: Jan, 2013
Comp #2: sale price — $310k; date closed: April. 2013
Comp #3: sale price — $260k; date closed: May, 2013
Average: $272k
Voila!
The same house that appraised for $240k in February now appraises more than 13% higher, at $272k.
In fact, even altering the mix of Comp’s by just one property — if it’s the lowest, and is replaced by the highest — can have a dramatic effect on prices.
Savvy owners (and their Realtors) know that, and time their refinancing accordingly.
