Stable Market

[ZZGAMAZZ]

I never felt comfortable adjusting for time because it always felt artificial, especially in the gung-ho days. I used the core rate quoted by the Fed, which is about as close as you can get, and since M2 affects us all, I thought it was ok for comparative analysis.

although it seems that most appraisers hate it, i feel that data about competing properties reported in the 1004MC is usually a perfect source.

 

[Mike Ault]

Is value not defined as the most probable price?

So, in a market which had no seller concessions for the last five years and all of a sudden every transaction has at least a 6% seller concessions involved, did housing values go up 6%? All the national data aggregators will certainly indicate so if the prices were raised 6% as well to give the cash back at closing. Or, they will indicate stable if the prices remain the same with a 6% concession. However, I think Warren Buffett's take on the matter is a little closer to the truth. "Price is what you paid, value is what you got.." You didn't get 6% more house or house that was 6% more valuable, there is just 6% floating around out there waiting for the lender to castigate the appraiser over whose analysis of the situation doesn't match the national data.

 

[ZZGAMAZZ]

You are so good to accurately find increases of one half percent. And I thought I was good.

Reliance on "rounding," LOL, like sometimes it is so F exhausting to conduct sufficient due dilignece to determine anything reasonably meaningful, that the impetus falls on the need to create an explanatory narrative so convoluted that it can't be refuted.....

 

[Dublin ohio]

So, in a market which had no seller concessions for the last five years and all of a sudden every transaction has at least a 6% seller concessions involved, did housing values go up 6%? All the national data aggregators will certainly indicate so. However, I think Warren Buffett's take on the matter is a little closer to the truth. "Price is what you paid, value is what you got.." You didn't get 6% more house or house that was 6% more valuable, your "price" just went up 6%.

What about all of contacts with appraisal "gap" coverage by buyer. Appraiser comes in below the contract price which is above list price and buyer bring cash to the table to make up the difference. So if the appraised "value" is the most probable price. What are market conditions based on. Obviously not the most "probable" price

 

[Terrel L. Shields]

Is value not defined as the most probable price?

Against what benchmark? Math? The value remains the same. Only the price changed. No additional buying power is created.

 

[Fernando]

I still applied a time adjustment to the comp that had a contract date of 04/25.

I admit, from the winter market to the spring market that 0-90 day time adjustment is vital. So hard to support the adjustment. But when I look back six months later it is as clear as day....seasonal market trends.

When I started appraising, never had to adjust for contract date.
More recently reviewers asking for adjustments on contract date. WTF.
Adjusting for every little detail. Ridiculous.

 

[chad hampton]

Just finished up a 1.8 mill home and applied a 3% adjustment. 54k adjustment.

Even on a 300k home that is 9k. Could make or break the deal.

Zillow or avms do not have any issues applying time adjustments at any %. We shouldn't either. Makes us look bad.

that’s true if you’re using a 12 month old sale. I haven’t used a sale that old in a while, but I would have to consider a time adjustment based on 3% if I did.

 

[Tawfik Ahdab]

DWiley said:
“Is value not defined as the most probable price?“

There’s a false equivalence here.

If value is the most probable sale price, price itself is the actual nominal sale price, which may not be the most probable. So let’s avoid trying to use these terms interchangeably or imply that they are indistinguishable in practice.

 

[NC Appraising]

When I started appraising, never had to adjust for contract date.
More recently reviewers asking for adjustments on contract date. WTF.
Adjusting for every little detail. Ridiculous.

When I started appraising in 2004 I was trained to only mark the middle boxes. I did not even know what a time adjustment was until I went on my on.

I've been making time adjustments since 2016. I swear I think I'm the only appraiser in my market to make time adjustments up until 2021.

In 2022 I remember a reviewer appraiser questioning why I was making a time adjustment on a 2 month old sale. Another one of those old "appraisers" tales that you cannot make time adjustments to closed 0-90 day old sales.

I always wondered were these things come from?

 

[Fernando]

When I started appraising in 2004 I was trained to only mark the middle boxes. I did not even know what a time adjustment was until I went on my on.

I've been making time adjustments since 2016. I swear I think I'm the only appraiser in my market to make time adjustments up until 2021.

In 2022 I remember a reviewer appraiser questioning why I was making a time adjustment on a 2 month old sale. Another one of those old "appraisers" tales that you cannot make time adjustments to closed 0-90 day old sales.

I always wondered were these things come from?

Has your market been increasing and decreasing so much that you have to use time adjustments. Too subjective and most easily to debunk.
You can fool the public and reviewers but real appraisers avoid using time adjustments and get most recent sales similar to subject, thus don't need to do so much adjustments.