Valuation of residential properties with a not very dynamic real estate market

Case: Encarnación de Diaz, Jalisco, Mexico

Abstract

In a market economy, the value of goods is determined by the balance between supply and demand. The professional activity of valuation becomes complicated in small population centers, fundamentally the application of the Market Approach, since its basic principle is the comparison and homologation with other properties with the same or similar characteristics. The objective of this work was to propose an auxiliary tool in the process of valuation of residential properties for localities with little dynamic market through the use of preference factors measured to obtain the Market Value. The case study was Encarnación de Díaz, Jalisco, Mexico; and a descriptive and analytical methodology was used, since the traditional methods of real estate valuation were taken into account (replacement or replacement cost value, rental capitalization, comparison or market), however, the latter method, some modifications are proposed to be able to value properties that do not have comparables and that are in a not very dynamic market, as was the case in this locality. For data collection, 90 interview forms were used according to specialized bibliography consultation, to obtain information on the preference of residential properties by users, the results of the study show that the first place of the preferences was occupied by the variable of "safety in the area" with 37.39%, likewise, the external qualities of the dwellings "safety in the area, availability of services, urban image and proximity to the city center" were more important. It became clear that, in the real estate valuation process under the Market Approach, the critical point is obtaining information when the socio-economic conditions of the place where the property is geographically located are of a low or low real estate market. little dynamic. The proposal for obtaining the preference factor (perception of values) was fulfilled and is operable, as well as the process for obtaining the market value, but strictly adhering to what is suggested in the research carried out.