Pulling Comps in New Orleans

[Leilah Davis]

Any local Real Estate agents want to jump in here? 

I live in the 7th ward and am very familiar with the specific streets and nieghborhoods of this area. I'm not even talking about the neighborhoods that would necessarily show up on a map, I'm talking about smaller differences between one particular street vs another street just one block away. The sales prices of potentialy comps can be drastically different based on minute details. How do you account for this when putting together a CMA? Do you widen the area, or narrow it? Do you exclude properties in a nearby neighborhood that are on a bad street or block, or do you include them as comps and just make adjustments to account for the difference?

For example, I'm currently working on a CMA for a property in the St Claude area, just one block off St Claude. So if I find 3 comps as follows, which one(s) should I use?

1) A house technically located in the same area as my subject property, just 5 blocks away, but on the other side of Claiborne (a drastically worse area)

2) A house in the Marigny area, just 2 blocks away, but on the other side of St Claude (a drastically better area) 

3) A house in the 7th ward/treme area, almost 20 blocks away in a completely different neighborhood, but the neighborhood is overall very similar to my subject property

So which one(s) would be more valuable to me as a true comp? Or, should I just use all three and make adjustments as necessary based off of the differences? I am worried about pulling comps that are not similar enough to my subject property, but if I narrow the search so much that I'm only looking in the St Claude area, specifically ruling out properties on the "bad" side of Claiborne & properties on the other side of St Claude in the Marigny area, I'm limiting my search far too much and there just aren't any comps to pull! That's just a 5 block radius I've limited myself to. 

Thoughts? 

[Stephen Keighery]

Disclaimer, I am not a realtor and have only been focusing on the New Orleans market for 18 months so you there would be people who could give you better advise than me. I do invest full time in the area so deal with this every day though so will share what I do. For me I draw a border to create a comparable area. Somewhere like Claiborne in your example would be a border for me as we know the comps change drastically. Being a local you would know what those borders are. I would always start with sales over the last 6 months but if there isn't enough in that little area I would prefer to take it to 12 months than to use comps out of the border. I can usually find enough good comps that way. I will always drive the comps as I progress on the deal just to make sure that block doesn't change a lot from the subject property. It is really hard to comp in New Orleans and you just need to put in a little extra effort and thought.