Home listing and sales example

Jason and Julie live in a small bungalow style home that has 900 square feet with a one car garage and a 500 square foot basement. Their current home has two bedrooms living room, kitchen and bath on the main floor with a bath and laundry in the basement. They purchased their home 6 years ago for $80,000 and took out a 25 year 80% loan to value mortgage at 5.5%. Julie just informed Jason that she is expecting their second child in seven months. With the new addition Jason and Julie would like to find a bigger home. They would like a three to four bedroom home with two baths on the main floor, a finished basement with a bath, laundry, extra bedroom and a two car garage. The homes they have found that meet their room requirements and have 1100 to 1400 square feet on the main floor and finished basement. Over the past 6 years homes sales have increased on average 8% per year and interest rates have gone down from 5.5 % to 4%

		Recent sales of homes similar to their current home					Recent listings of homes in the size Range they are interested in.
	Jason and Julies home	1345 Maple	1852 Spruce	1510 Pine	845 Aspen		1810 Elm	1050 Cedar	1204 Oak	1910 Apple
Sale Price	NA	$126,500	$137,750	$131,700	$115,000		$244,600	$207,400	$228,500	$250,900
Sale Date	NA	6 months	7 months	6 months	5 months		3 months	4 months	8 months	6 months
Location	Good	Good	Good	Good	Average		Good	Good	Good	Good
Lot Size	7500 sf	7500 sf	7000 sf	7000 sf	7500 sf		9000 sf	9500 sf	9500 sf	10500 sf
Main floor Square footage	900	875	950	895	750		1450	1390	1400	1495
Basement square footage	500 400 finished	875 800 finished	600 500 finished	875 800 finished	500 400 finished		1450 1450 finished	1200 800 finished	1000 800 finished	1495 1400 finished
Bedrooms	2	2	2	2	2		4	3	3	4
Baths	1	1	1	1	1		2	2	2	2
Garage	1 car	1 car	1 car	1 car	none		2 car	2 car	2 car	2 car
Condition	Above Average	Above Average	Above Average	Above Average	Average		Good	Above Average	Good	Good
Taxes	$2500	$2400	$2600	$2500	$2100		$3400	$3200	$2950	$3700
Insurance	$800	$800	$800	$800	$750		$1100	$1050	$1000	$1400

Jason and Julie would like to have your assistance to find the following:

1. What is your estimated value of their current home today using the information in the grid above? Support your decision.