What does "comparative market analysis" (CMA) involve?

Comparative market analysis (CMA) is a tool used primarily by real estate agents to assess and establish the market value of a property. This method involves analyzing recent sales of comparable properties (often referred to as "comps") within the same area. By looking at properties that are similar in terms of size, condition, location, and features that have sold recently, agents can gain insight into the current market conditions and the pricing strategies that are effective.

The primary purpose of a CMA is to help sellers set a competitive listing price and to inform buyers about the fair market value of a property they are interested in. This analysis can also take into account active listings and properties that did not sell, providing a comprehensive view of the market dynamics.

In contrast, other options discuss methodologies or strategies that do not align with the specific function of a CMA. Predicting future market trends focuses more on forecasting, which is a different analytical approach. A financial analysis of property investments emphasizes return on investment and profitability rather than market value assessment. Meanwhile, strategies to increase property value through renovations pertain to property enhancement, which is outside the scope of a CMA's focus on current market pricing based on comparable property sales.