• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Declining/Stable/Increasing

How many quarters do you require before you mark stable from a declining market?

  • 1 Quarter

    Votes: 6 19.4%
  • 2 Quarters

    Votes: 14 45.2%
  • 3 or more Quarters

    Votes: 11 35.5%

  • Total voters
    31
Status
Not open for further replies.

Vegan702

Thread Starter
Senior Member
Joined
Feb 24, 2005
Professional Status
Certified Residential Appraiser
State
Nevada
I just wanted to get an idea of what you determine when making this distinction between these 3 choices? Since Vegas and a lot of other metro areas have been declining for the last 2 years more or less, there will be a time when you will have to start marking stable or even increasing again in your reports. I have started marking stable in some of reports as those areas have shown a significant adjustment. In the areas where it is just starting I am getting questioned about it by underwriters. In these instances the data is showing that the decline may be over, however the data is so fresh that there is not a trend that extends for more than 60-90 days or so. So at what point are you comfortable in marking that box stable or increasing? I have been using 90 days myself. If the area has declined over the last 24 months, then the last 90 days there is a significant change in the direction of values I market stable or increasing if there is an up wards movement.
 

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
Neither. I want to see quarter over quarter data (or year over year if data is limited) show stable conditions, otherwise, it is still declining.
 

Calvin the Airedale

Elite Member
Gold Supporting Member
Joined
Aug 17, 2004
Professional Status
Certified General Appraiser
State
Ohio
This isn't a fair question. The issue of market stability does not just relate to what has recently happened but to what is likely to happen as imagined in the minds of the market participants.

Value is the present worth of future benefits. As such, it is a forward looking concept.
 

Metamorphic

Senior Member
Joined
Mar 15, 2008
Professional Status
Certified Residential Appraiser
State
California
I wont consider it till I'm not lopping thousands off the sales price of the comps I'm using.
 

NC Old Guy

Junior Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
North Carolina
Last 3 mos over the same period, 1 year ago. If go last 3 mos with the prior 3 mos, and the 3 mos before that could exaggerate or nullify what is truly going on because of seasonal variations. As of now, would be comparing late fall/early winter with summer & those are not comparable periods. Also helps if you find it in (1) avg sales price (2) avg sale price/sqft (3) median sales price (4) median sales price per sqft. Then the absolute anchor is when the number of sales are off by 50%!!! Have had all of those with all the numbers in the report and state exactly what area and time frame they are calculated for and still have lender argue..."but, but, Fannie Mae hasn't declared us to be a declining area"... or PMI company or whatever the reason of the day might be. Of course their clincher argument is "...but none of the other appraisers are marking the declining box.." and "we've checked with XYZ Bank and none of their appraisers are marking the declining box either..." Unforunately, if they don't want to be educated about the market while we're talking on the phone about the issue, I tend to respond that perhaps they should read the newspaper/watch the news and associate with more ethical appraisers.
 

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
The new 1004MC form is set up the way this question is, which only tells you that Fannie, the maker of the form, is in this for the mortgage industry. We are strawmen set up as a self-policing system that is ignored and put at a disadvantage as much as possible.

I do have to disagree with Alvin, a bit though, as I don't like to get into a crystal ball and determine which way the market is going to go. I prefer to just report on what it did, and what it was, up to the effective date of the appraisal.
 

TJSum

Elite Member
Joined
Nov 12, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
Many of my markets seem to be forming a bottom as well. But I do not think one quarter is enough to mark stable. I need to see at least six months of values holding stable PLUS six months or less of available inventory showing the supply and demand are in balance. How many current contracts vs. available inventory also will be taken into account. If I see a balanced inventory with values holding stable for at least six months, then I check the stable box.
 

Calvin the Airedale

Elite Member
Gold Supporting Member
Joined
Aug 17, 2004
Professional Status
Certified General Appraiser
State
Ohio
The new 1004MC form is set up the way this question is, which only tells you that Fannie, the maker of the form, is in this for the mortgage industry. We are strawmen set up as a self-policing system that is ignored and put at a disadvantage as much as possible.

I do have to disagree with Alvin, a bit though, as I don't like to get into a crystal ball and determine which way the market is going to go. I prefer to just report on what it did, and what it was, up to the effective date of the appraisal.

It's not your job to determine which way the market is heading, only God knows the answer to that question. It's your job to determine which way the buyers and sellers believe the market is heading. Their purchase and sale decisions are based on their outlooks of the future.

As for value being the present worth of future benefits, that's right out of Kinnard, so I'm on pretty solid ground.
 

Craig Farr

Junior Member
Joined
Sep 26, 2004
Professional Status
Certified Residential Appraiser
State
Arizona
Six-month periods in my market. Anything less just doesn't have adequate data from which to extract reliable statistical trends. And, yes, I am also just beginning to 'sense' a bottoming. Six-month average price-per-sqftGLA versus previous six-month average has stopped declining and is even increasing in a few housing groups and areas. BUT the supply (current lists divided by past 12 months' sales) is still no lower than 9 months. In high-end housing I am STILL seeing a 4-year supply!!!
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
2 quarters with SEASONAL caveats. won't really know until the SPRING selling season hits. (at least in cold climates).
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks