Know the Market
While it's worth looking at a graph of recent median home prices, here's the thing: These graphs rarely line up in different locales. You can look at what housing prices have done nationally in recent years and months -- for example, Moody's Analytics predicts a 1 percent increase in home values in 2011, then 4 percent in 2012 -- but that's only the beginning of knowing your local market [source: MIT Center for Real Estate].
Again, look to comparables. Take a look at what local houses were selling for a year ago, six months ago, three months ago and now. Does the line point up or down? If you're in a seller's market, you might tack on an additional 10 percent. In a buyer's market, you might subtract that 10 percent. (If you don't want define the market yourself, explores sites like Trulia.com, which include trajectories of local markets.)
Also, explore the effect of foreclosures and short sales. One foreclosure in the blocks near you shouldn't sink your sale, but if more than 25 percent of the sales in your area are bank sales, you'll have to reduce your price in order to compete.