Posted 2 months ago

Real Estate Comps in Maryland: Why the 1-Mile Radius Fails

Map showing the difference between a 1-mile radius and a specific neighborhood polygon for running accurate real estate comps in Maryland.

Image by Maryland Cash Home Buyers: In Baltimore, crossing the street changes the value. Use polygons, not circles.

The "Radius" Mistake: Why the 1-Mile Comp Rule Fails in Maryland

If you took a real estate course in 2015, you were probably taught the "1-Mile Rule" for running comps: Draw a 1-mile circle around the subject property, filter for sold, and average the price per square foot.

In Phoenix or Dallas, that might work.

In Baltimore, that will bankrupt you.

Maryland real estate is hyper-segmented. In neighborhoods like Hampden, Canton, or even parts of Silver Spring, crossing a single street can drop property values by $50,000. If you are using a generic radius that crosses a major arterial road or a neighborhood boundary line, your ARV (After Repair Value) is fiction.

The "Frankenstein" Comp

I see investors constantly trying to justify a deal by using a "Frankenstein" comp—pulling a sale from the "good" side of the street to justify a buy on the "transitional" side.

According to data from ATTOM Data Solutions, which tracks granular property data, foreclosures and distressed sales cluster heavily in specific micro-markets. If you ignore these micro-boundaries, you aren't investing; you're gambling.

How We Run "Appraiser-Grade" Comps

At Maryland Cash Home Buyers, we don't use a radius. We use a Polygon.

Define the Boundaries: We map the neighborhood by physical barriers (major roads, parks, train tracks).
Same Asset Class: We never comp a rowhome against a detached house, even if they are next door.
Renovation Standard: We only look at renovated sold comps to determine ARV. You cannot use a "grandma house" sale to predict the value of your luxury flip.

The Math of Safety

We protect our downside by being conservative on the ARV. If the comps say $250k–$270k, we underwrite at $250k.

We share this conservative valuation approach openly with sellers. It helps them understand that our offer isn't low; it's accurate. We even publish the exact formula we use to strip out the guesswork:

https://marylandcashhomebuyers.com/our-offer-calculation-transparency/

The Takeaway

Stop drawing circles. Start drawing polygons. If you don't know exactly where the "neighborhood line" is, you shouldn't be buying there.