When the Comp Doesn't Exist: How BETTER Values What Hasn't Been Built Before

One of the more interesting challenges we face at BETTER is a problem most developers would envy: we're often building housing types that don't have a deep resale history in the neighborhoods where we work. Small-footprint homes on compact lots, flag lots tucked behind street-facing parcels — these are products that Raleigh and Durham are increasingly calling for, but that the market hasn't fully priced yet. When it comes time to estimate value, the traditional approach of finding three near-identical recent sales simply doesn't work. So we've developed a framework for building a defensible value thesis from the ground up, one that matches the methodology of disciplined valuation even when the data isn't handed to us cleanly.

Looking Across Neighborhoods

When a product is new to a given street or block, we look at where similar homes have traded across comparable neighborhoods. A 1,200 square foot detached home in Brier Creek and one in Watts-Hillandale aren't the same, but understanding the spread between them and what explains it tells us a lot. Walkability, school proximity, lot premiums, and buyer demographics all differ in patterned ways. By anchoring to those patterns, we can triangulate where a new product should land in a neighborhood where it hasn't existed before.

Adjusting for Size

Maybe no identical sales exist nearby. What usually does exist are homes that are somewhat larger or smaller. A 1,500 square foot home in the same neighborhood gives us a starting point, and the question becomes: what does the market actually pay per square foot at different size bands? Smaller homes often command a higher price per square foot, because buyers are paying for location and livability rather than just space. We track those size-adjusted trends carefully so we're not applying a flat rate that was calibrated on a different product.

Finding the Right Housing Type Analog

For attached homes, the direct comp pool is often thin. End-unit townhomes are a useful proxy, though. They share an exterior wall on one side, capture natural light on two or three exposures, and tend to trade at a premium over interior units for reasons that translate well to our product. By isolating end-unit sales and adjusting for finish level and square footage, we can construct a reasonable value range even when the exact product type hasn't traded recently in the submarket.

Understanding What the Lot Is Actually Worth

Lot configuration matters, and not always in the ways people assume. Flag lots, those set behind a street-facing parcel and accessed by a narrow drive, are often reflexively discounted. But that misses part of the picture. Flag lots frequently deliver genuine privacy: no street exposure, natural separation from neighbors, a backyard that actually functions as one. Buyers who seek them out are often self-selecting for that quality, not tolerating a deficiency. The adjustment isn't automatically negative. It depends on how the home sits on the lot and who the likely buyer is.

Isolating the Variables That Move Value

Once we have a reasonable comp set, we work to isolate the specific features that differentiate our product. A screened-in porch in the Carolina climate has real, quantifiable value, and paired sales across the market can tell us what buyers have demonstrated they'll pay for it. A chef's kitchen in a 1,200 square foot home is a deliberate trade: less square footage, higher livability, a specific buyer profile. Backyard depth, ceiling height, parking configuration — each variable gets examined on its own terms, so we're building up value from first principles rather than hoping a single comp does all the work.

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Taken together, this process takes longer than pulling comps on a mature product type. But it forces the kind of rigor that holds up under scrutiny, whether from a lender, a partner, or anyone else who wants to understand how we got to a number. And frankly, this analytical work is central to what makes BETTER good at what it does. Valuing products that don't have a clean history isn't a limitation we work around; it's a skill we've built deliberately.

There is inherent uncertainty in any underwrite that relies on adjustment rather than a perfect comparable. We don't pretend otherwise. What we can say is that the market has consistently shown it wants these housing types, and that our conservative assumptions have tended to be an under promise. The returns our projects have generated have repeatedly outpaced our projections, not because we got lucky, but because we took the time to understand the value before we broke ground.

The density push in Raleigh and Durham isn't slowing down, and the housing types that answer it will keep evolving. At BETTER, navigating that frontier, analytically and not just architecturally, is part of what we do.