Determine rate of market decline

[Tom Woolford]

cwd,

I'm seeing the same thing in a few entry level markets. The high ticket stuff is still dropping like a stone, buy small conventional homes and nice manufactured homes seem stable to increasing in some areas of the county.

 

[Deuce of Spades]

Market condition adjustments is the appropriate term -
I had an instructor point that out a few years ago. Time always passes, market changes is what you adjust for.

 

[The Bob]

Speaking of changes in the market I actually noticed an upswing in a small market area for the past 3mos. I looked originally at 12mos and it was a down trend but the comps I pulled which were very recent were telling me otherwise, so I looked at the last 6mos, still a down trend, then the last 3mos.....up....about 2%. I had actually appraised the subject six months earlier so it was a good chance to really compare the market.

In my comments on market conditions I noted the 12, 6 and 3mos trends. But, I could not bring myself to check the increasing box knowing this is most probably a temporary condition. So I basically said I didn't have any confidence in the 3mos trend due to the broader overall market conditions. Instead I checked the stable box as I could not ignore the upswing entirely.

I have noticed more market areas changing from declining to stable. But, it's hit and miss. Some are in decline. Others are presently stable. Heck I did a property last week thats approximately 3-4 miles away in the same part of town but a slightly different market area that is still in decline. So, It's just the luck of the draw these days.

Anyone else seeing these mixed trends? And if you are, how might you be checking the check boxes and explaining your conclusions?

I have areas with the same thing. I just note the data on values is mixed and make a call as to what is the most recent trend. Some areas have dropped since early 2007, but may have stabilized since late summer-early fall. I look at the last 6 mo, the prev 6 mo, and the year ago 6 mo period. One thing to be careful of is that there may have been a change in the average GLA. So if the avg GLA last year was 1400sf and the avg GLA for the most recent sales is 1200sf, you need to take that into account.

 

[c w d]

One thing to be careful of is that there may have been a change in the average GLA. So if the avg GLA last year was 1400sf and the avg GLA for the most recent sales is 1200sf, you need to take that into account.

Yes, I agree. I noticed that trend in an area that is still experiencing new home building to a significant extent. It was interesting. I examined 24, 12, 6, & 3mos trends and it was clear; the builders were increasing their GLA as time progressed. It's a nice way to inflate an area's values even among existing home sales.

However, in the example I noted in my previous reply I looked at both the overall market of SFR and the comparable market with a GLA variance of 10% to keep things tight. The trends matched for both data sets.