Unit of Comparison
A common denominator used to compare properties — price per square foot of living area, price per unit, price per acre, or a gross rent multiplier. Choosing the unit the market actually uses is fundamental to credible comparison.
Related Terms
Price Per Square Foot
Sale price divided by gross living area — the most common unit of comparison in residential markets.
Sales Comparison Approach
A valuation method that estimates a property's value by comparing it to similar properties that have recently sold in the same market area.
Gross Rent Multiplier (GRM)
GRMThe ratio of a property's sale price to its gross monthly (or annual) rental income.
More in Market Analysis
View allMarket Conditions
The current state of supply and demand in the real estate market for a particular property type in a defined area.
Absorption Rate
The rate at which available properties are sold or leased in a specific market during a given time period.
Days on Market (DOM)
DOMThe number of days between when a property is listed for sale and when it goes under contract.
Months of Supply
The estimated time it would take to sell all current listings at the current sales pace, calculated by dividing active inventory by the average monthly sales rate.