Final answer:
A comparative market analysis estimates a property's value by analyzing the sales prices of similar properties within the same area, focusing on the median price and the price variation.
Step-by-step explanation:
A comparative market analysis (CMA) is a tool used by real estate professionals to estimate the value of a property by comparing it with similar properties that have recently been sold in the same area. To perform a CMA, data must be collected on recent sales prices for properties in the local real estate market. Once this data is collected, it is analyzed to determine the property's value.
The analysis often focuses on the median price and the variation of prices of the collected data. The median provides a central value, while the variation helps understand the range of prices in the market. Through this process, consumers and producers indirectly work together to determine the market price for a property based on supply and demand dynamics.