In paired sales analysis, how must the sale properties compare?

In paired sales analysis, the properties being compared should be identical in all relevant attributes. This method is based on the premise that if two properties are as similar as possible, any difference in their sale prices can be attributed to the differences in their transaction conditions, such as timing or market fluctuations. This method provides a clearer view of how market factors influence property values by isolating the impact of these external variables.

By ensuring that the properties are nearly identical, assessors and appraisers can make more accurate comparisons. For instance, if one home sold for a significantly higher price than its nearly identical counterpart, it could indicate specific market dynamics at play, rather than inherent differences in the homes themselves. This precision in selection helps ensure that the analysis is effective and robust, leading to valid conclusions about value shifts or trends in the market.