Are properties really selling over market value?

[George Hatch]

Then that's what we agree upon, the indicated to the trend regardless of how wisely or poorly we think those buyers are behaving. The other two don't drive the trend.

And yes, I completely agree that the possibility exists that some of these buyers may rue the day they ever even considered jumping into this market at this time. As well, I also agree with the possibility that I might be dead wrong and these trees will end up growing to the sky just like AK says they will.

All this math changes if the mortgage interest rates go up or down by 1%.

 

[TerryRohrer]

As always ... IT DEPENDS.... on factors like the appraiser's familiarity with the data/market area, the size of the market area, the number of available similar recent comparable sales to bracket every feature, etc. In your area it may seem like a "shotgun approach" but in a well-defined growing bedroom community area with tons of recent sales it may work just fine and allow for greater efficiency. Too many posters on this forum wind up comparing apples to oranges without taking the above listed factors (among many others) into account.

Sure, I understand each of us has it all figured out. I purposely don't become entrenched in any given market or property type for all time for that reason alone. Once you begin to believe you know everything going on where your working, you begin to take shortcuts and start missing the facts, and more importantly, changes in trends. After all, you already know it, so why do the work! And I'm not taking a shot at you, I fully understand what your saying. But I have watched some of the best appraisers I have known fall into that trap. Whether you entertain it as a possibility or not, it should be a real concern.

 

[The Warrior Monk]

History does tend to repeat itself! I saw a headline the other day talking about the "New Roaring Twenties," drawing parallels between now and the last pandemic in 1918. What followed was 10 years of fun and then 10 of misery, not the least of which included a very large number of folks losing all their real property because the tax man came and they couldn't pay. You may be seeing the canary in the coal mine!

Florida does have a different tax structure from other states. Basically, the don't have a state income tax, and make it up with real estate taxes. Occasionally I will need to research sales/listings in FL for some projects, and the real estate taxes there are WAY higher than the Hamptons for properties of similar value.

 

[Alsie35]

Sure, I understand each of us has it all figured out. I purposely don't become entrenched in any given market or property type for all time for that reason alone. Once you begin to believe you know everything going on where your working, you begin to take shortcuts and start missing the facts, and more importantly, changes in trends. After all, you already know it, so why do the work! And I'm not taking a shot at you, I fully understand what your saying. But I have watched some of the best appraisers I have known fall into that trap. Whether you entertain it as a possibility or not, it should be a real concern.

No offense taken. I was just thinking about the fact that some newbie appraisers may try to emulate appraisers who have been "around the block" a few times, without even being aware of the large "blind spots" in their knowledge.

And - you are right. I do know my market area. And I always do the work.

 

[TerryRohrer]

I am only a semi liberal btw...as you probably are finding out ! Why do folks stereotype liberals...well I probably do the same wrt conservatives to be fair.

Damned if I don't believe you might have a sense of humor! At a minimum, you have mastered the art of understating the obvious! Thanks for the chuckle!

 

[Alsie35]

Florida does have a different tax structure from other states. Basically, the don't have a state income tax, and make it up with real estate taxes. Occasionally I will need to research sales/listings in FL for some projects, and the real estate taxes there are WAY higher than the Hamptons for properties of similar value.

Ditto with Texas. And that is as it should be. Keep everything local as much as possible and away from the bureaucrats in the capitol city.

As far as Texas goes .... the TX State legislature meets every TWO years, not every year. And that is also as it should be. Many of those legislators have real jobs outside of Austin. Something that ought to be emulated.

 

[J Grant]

Then that's what we agree upon, the indicated to the trend regardless of how wisely or poorly we think those buyers are behaving. The other two don't drive the trend.

And yes, I completely agree that the possibility exists that some of these buyers may rue the day they ever even considered jumping into this market at this time. As well, I also agree with the possibility that I might be dead wrong and these trees will end up growing to the sky just like AK says they will.

All this math changes if the mortgage interest rates go up or down by 1%.

we agree on some things after all !

But when applying the MV definition terms to vet a price/when adjustments to best comps indicate a OMV lower than a SC price, it is not about a personal judgement wrt to how poorly or wisely the buyers are behaving. The fact is, Appraisal development will at times yield a different value than a SC price, and it happens more frequently in volatile markets. Nothing personal or judgmental about it

RE agents easily recognize it which is why they are writing SC prices waiving appraisal clause ( if they find a buyer to do it )

... appraisal I am doing now. buyer price 100k over the highest recent sale in the subdivision of a mid 400k price range house ...they signed clause waiving appraisal if lower than SC . Hope they love the house, that they live there a long time or the market catches up to them. But as of today, my OMV is about 80k less than they paid. And per their contract they are obligated to pay the full price .And I spent hours on the thing, still working on it.

 

[Alsie35]

History does tend to repeat itself! I saw a headline the other day talking about the "New Roaring Twenties," drawing parallels between now and the last pandemic in 1918. What followed was 10 years of fun and then 10 of misery, not the least of which included a very large number of folks losing all their real property because the tax man came and they couldn't pay. You may be seeing the canary in the coal mine!

Actually, history NEVER repeats. We just recognize patterns that make us think it does (because our brains are pattern recognition machines, and not very good at it BTW - Scott Adams has written a lot about this). But each situation has different actors, causes and consequences.

 

[EddieB]

I’ve been having these same discussions with myself lately. Some days I just don’t understand myself

 

[J Grant]

I hate this appraisal and wish someone here could finish it for me. Then again that is kind of all of them lately...