Valuations: who sets the number, and why it can fall

A property's value is not printed anywhere until someone sells it. Between sales it has to be estimated, and on a project page that estimate comes from a valuation — a professional opinion of what the property was worth on a given date.

Who does it

In Israel, valuing real estate professionally is a licensed occupation under the Real Estate Appraisers Law. A licensed appraiser (shamai mekarke'in) signs the valuation and is responsible for it. For a valuation to be useful to holders, the appraiser should be independent of the platform and of anyone selling the asset. On the demo pages, no real appraiser is named.

How often

Once or twice a year per project. Property values move slowly and an appraisal takes work, so a monthly figure would mostly be noise. Between appraisals the last value stands, with its date shown next to it.

The three methods

• Comparison: what similar properties nearby actually sold for recently, adjusted for size, floor, condition and date. The main method for flats.
• Income: what the rent is worth as a stream, using the yields at which similar let properties trade. Used for shops and offices, and as a cross-check for let flats.
• Residual, for projects not yet built: the value the finished property would have today, less the cost and time still needed to finish it and a margin for the risk that it runs late or costs more.

An appraiser usually uses more than one method and explains how they were weighed.

Why a value can fall

Fewer sales in the area, softer prices on comparable homes, higher interest rates, a competing project launching nearby, a repair that shows what upkeep really costs, or a delay that pushes a building's completion further away. Each project's history states the reason next to every change, falls included.

What a valuation is not

It is not a price anyone has paid, and it is not an offer to buy. A sale can land above or below it, takes time, and carries its own costs. Value change becomes cash only when the asset is sold. A rising valuation on a page is a reason to read the method, not a sum anyone has received.

How to read a valuation history

• Check the date of the latest appraisal before relying on it.
• Read the reason given for each move, especially the falls.
• Compare the change since purchase with the hold period, not with a single year.
• Ask which method was used, and whether it suits the kind of asset.