And here we go with Revisions requested on Time Adjustments

[OG80]

Just turned in my 1st report using the Time Adjustments requested. And here is the very first revision request. I knew that when they differed, that

1004MC data indicates Declining price trend (and positive time adjustments are applied in the sales grid – please confirm / revisit if necessary or clarify (and indicate how the adjustments were determined / applied)

Here are my "Market Conditions" Explanation of what I searched for:
Broad Market Conditions
Search Criteria Description: To the West zzz, to the East zzz to the South. Includes Detached units with a lot size of up to 10,000 sq ft and a Finished Area Above Grade between 1788 and 2683 sq. ft. Additional factors include between 3-4 bedrooms and 2 baths. Searched dates are 800 days prior.

Date of sale search was extended to include sales up to 800 days. Adjustments reflect changes in the competing market median sale price per month within the board market. The following specific adjustments were applied: Comp #1: A 1.61% change from sale date, rounded to $6,487. Comp #2: A 2.57% change from sale date, rounded to $13,260. Comp #3: A 5.91% change from sale date, rounded to $26,419. Comp #4: A 12.98% change from sale date, rounded to $46,719. (DATAMASTER)

Here is the 1004C



Anybody have a good response to this?

 

[glenn walker]

800 days ?

 

[shrubberyvaluation]

You can only get so precise. I've always rounded to .25% for market condition adjustments.

Why 800 days? The trend is supposed to be for the year.

Easiest explanation, if true, market increased in months xyz, stable in months xyz, decreased, in months xyz, overall trend is declining, however adjustments reflect the overall change from the contract date to the effective date.

 

[J Grant]

Just turned in my 1st report using the Time Adjustments requested. And here is the very first revision request. I knew that when they differed, that

1004MC data indicates Declining price trend (and positive time adjustments are applied in the sales grid – please confirm / revisit if necessary or clarify (and indicate how the adjustments were determined / applied)

Here are my "Market Conditions" Explanation of what I searched for:
Broad Market Conditions
Search Criteria Description: To the West zzz, to the East zzz to the South. Includes Detached units with a lot size of up to 10,000 sq ft and a Finished Area Above Grade between 1788 and 2683 sq. ft. Additional factors include between 3-4 bedrooms and 2 baths. Searched dates are 800 days prior.

Date of sale search was extended to include sales up to 800 days. Adjustments reflect changes in the competing market median sale price per month within the board market. The following specific adjustments were applied: Comp #1: A 1.61% change from sale date, rounded to $6,487. Comp #2: A 2.57% change from sale date, rounded to $13,260. Comp #3: A 5.91% change from sale date, rounded to $26,419. Comp #4: A 12.98% change from sale date, rounded to $46,719. (DATAMASTER)

Here is the 1004C

View attachment 96997

Anybody have a good response to this?

I am confused reading your comments but I'll try-.

It is a pretty small sample above to conclude that prices are declining, with only the last quarter lower - yet list prices are still higher than the prior quarter - a year for the MC form is 362 days, not sure where 800 days comes in. I would want to see longer DOM, lower list prices,and more data to call a trend declining ( or rising)

That said, I HATE this idea of adjusting each sale individually for a time change. And if one does not understand it, then dont; do it ! Neither Fannie nor freddie required that time adjustments be made this way at different rate for each comps sale. They did show a chart done like that as an example in a freddie letter. All they want is support for why you did or did not make market condition adjustments.

I myself don't understand why you made positive adjustments to the comps when you conclude a declining price trend on the MC form - They want time/market conditions made from the contract date, not sale date-

You can offer to remove the adjustments because of confiting data , or offer support for why they are credible -

 

[Dublin ohio]

Why would anyone place any confidence in a 1004mc with only 17 sales in a year. I would have basically explained that the 1004mc has too small of a sample size to be considered credible and would have presented a more macro analysis of the market. I am doing one tomorrow and may only have 6 similar sales in the past year. Won't put any weight on the 1004mc and use more of a macro analysis of the market. IMO you set yourself up for a revision request

 

[OG80]

800 days ?

I went back 800 days in order to get a larger sample size. I wanted get over 100 in the Broad Market.

 

[shrubberyvaluation]

I went back 800 days in order to get a larger sample size. I wanted get over 100 in the Broad Market.

A sample size for what? Do your comps go back 800 days? Trend is for the past 12 months.

 

[CGinMN]

Going back 3 years can sometimes be helpful to provide context, but if your 6- and 12-month samples are not large enough, going back further won't help derive the adjustment to your 0-12 month sales. The way to broaden your sample is to expand your geographic area and/or limit the constraints on the physical characteristics. It would be helpful to know the subject's specs and what area you're in.

 

[Fernando]

When I see your MC, this is what I see:
1.# of comparable sale stable with slight decrease prior 4-6 months.
2. # of active listings stable in past 6 months.
3. Median Comp Sale Price and List Price are inconclusive. Get better data to figure what's happening.
4. Days on market stable at about one month in past 6 months.

Given set of numbers, interesting how we interpret the data differently.

 

[OG80]

A sample size for what? Do your comps go back 800 days? Trend is for the past 12 months.

No, they don't. I went back 800 days for the Broader Market. 2 years data shows trend when you only have a small number of sales in the previous 12 months. Wouldn't you agree?