I disagree.
What it sold for at ANY time is mostly irrelevant. Why would the 2002 price be more relevant than the 2005 price, or either of those more relevant than some other random day (1993, or 1977)?
What matters is what NOI you can get from it... not what it sold for at some arbitrary point in time. Determining what it's worth has almost nothing to do with past sale prices, IMO.
To my way of thinking the 2002 to 2003 prices are relevant as a price point comparison...minus the escalation of prices during the bubble. The bubble is fake. So...you take it out. It does not mean...that prices can not fall further than this level...but for me anyway...it is one data point....at a point in time to include in any analysis.
One stands a better chance of making a successful real estate decision if one takes out the bubble prices. Why is this not relevant?
NOI is one calculation. Calculating positive cash flow including mortgage and interest is another. Using this calculation, one can determine at "which point" the property stands a good chance of breaking even with various levels of loan balances. One can determine the best ratio between cash down and loans to pull this off...etc.