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declining values

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piaford

Thread Starter
Freshman Member
Joined
Apr 3, 2007
Professional Status
Certified Residential Appraiser
State
North Carolina
This is not the first appraisal I've done where I'm coming in at a value lower than what the borrower paid just this past spring. Research indicates that this market: The Outer Banks of NC - is not being affected by the overall decline in the real estate market - but if I only use sales within the last six months like the lenders want, it appears to be declining. I haven't marked anything as decling yet - or as oversupply - but should I? And how do I explain a decrease in value if I don't mark those items!?!?!?!? Did they overpay in the spring?

One thing I can say, in this market, properties DO typically sell more easily and possibly for more in the spring than any other season due to this market being a vacation rental haven.

help!!!!!!!!!:huh:
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Sounds like it might be declining to me!
 

Thomas Fiehler

Senior Member
Joined
Jun 2, 2003
Professional Status
Certified General Appraiser
State
Ohio
If the recent sales indicate a decline, and they are arms-length sales, then it is declining. Do no use the older sales since it appears you have recent sales.
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
pia,

You need to be sure your market anaysis encompasses enough time to account for the seasonal flux.

Spring sales year over year and fall sales year over year ...

Your trend analysis is not solely dependednt on the sales in your grid.

Be very thorough in your analysis and explain it well in your report.

You may find that the subject area is in fact declining. In every area that has had a decline the initial stages are sometimes unclear. it always has to start somewhere.
 

Rudy Canoza

Senior Member
Joined
Sep 27, 2003
Professional Status
Certified Residential Appraiser
State
California
Are the comparable listings and comparable pending sales priced lower than the comparable closed sales?

What is the ratio of trustee's deeds to arms-length transactions in the defined market area?

What is the NOD trend?
 

piaford

Thread Starter
Freshman Member
Joined
Apr 3, 2007
Professional Status
Certified Residential Appraiser
State
North Carolina
OK . . . thanks for everyone's input . . . . what "verbage" does anyone use when "declining market" is marked and/or "oversupply" is marked.!?!? I haven't ever had to mark those boxes before!!!!!:Eyecrazy:
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
pia,

Let your trend analysis dictate your verbiage. Each assignment will be different depending on the applicable data.

Once you get a clear picture of the trends, explaining how you used the data to arrive at your conclusion will become apparent. In the end you will arrive at a conclusion on the subject neighborhood as having a % trend. Then you will explain how that trend does or does not indicate adjustments in your grid.
 

mike32716

Member
Joined
Jan 23, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Price trend data

You local MLS may have monthly stats which will show price trends. They are definitely good for average market time (Days on Market). My market is Central and West Florida and we are declining and oversupplied. :sad:

However, the days on market are within 3 to 6 months for the houses that actuall sell.

About a year ago lenders were screaming if the declining or oversupply boxes were checked. Now they almost demand that declining and oversupply be checked unless you can prove otherwise (depends on your market I know). Funny how things change.
 

JRS at OBX

Elite Member
Joined
Jun 13, 2006
Professional Status
Certified Residential Appraiser
State
North Carolina
Pia, I'm glad to see a local appraiser on the forum!
 
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