Do you put the Pending Date on the grid?

[Mztk1]

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If this is not the standard technique in applying time adjustments, please advise.

I think the confusing thing for most is the "Entered Escrow" part. Linguistically it is correct to say, but we tend to think of "Escrow" in a different way, like "$8,000 was put in escrow for the roof to be replaced after closing".

"Entered Escrow 02/15/2008", for those who are confused, is synonymous with saying "Contracted 02/15/2008".

 

[EVAUSA]

I honestly haven't seen that technique before but then, I'm not in your Market. Here a quarterly analysis can reveal historical trends up to the effective date of the report. Sale prices tend to fluctuate and not conform to a straight-line rate such as 2% a month.

I compare the time adjustment I derived from the market to the www.dqnews.com figures, and most of the time they are pretty close. In Ojai, dq actually recorded something like a positive 4% change in the median housing price in the same zip over the past 12 months. This figure is not neighborhood or property specific, but represents the market as a whole. Time adjustments are extracted for each report. In my research, I found the market for the subject indicated -2% per month decline over the past 6 months. Granted, time adjustments are complex and each month fluctuated around 2+/-%. Sometimes when working more dated sales, a flat adjustment over the entire time period works better.

 

[EVAUSA]

I think the confusing thing for most is the "Entered Escrow" part. Linguistically it is correct to say, but we tend to think of "Escrow" in a different way, like "$8,000 was put in escrow for the roof to be replaced after closing".

"Entered Escrow 02/15/2008", for those who are confused, is synonymous with saying "Contracted 02/15/2008".

To maximize space on the line, I just recently changed my template to say
02/152008 PD (pending date) and CD after the closing date. Hopefully that will be less confusing.

 

[Mztk1]

Well mine is confusing too. I added a line at the bottom that says "Date of contract" and then just have a date there without any other qualifiers. I'm sure that takes a reader a couple of times to notice and/or get used to.

 

[Joyce Potts]

Back to your original question, I put (if available) the pending or contract date, the closed date, the days on market, the list price at sale and the original list price.

It can EASILY be fit into the grid and affords a wealth of information, despite the fact that many lenders don't really want to know.

 

[Blue1]

I compare the time adjustment I derived from the market to the www.dqnews.com figures, and most of the time they are pretty close. In Ojai, dq actually recorded something like a positive 4% change in the median housing price in the same zip over the past 12 months. This figure is not neighborhood or property specific, but represents the market as a whole. Time adjustments are extracted for each report. In my research, I found the market for the subject indicated -2% per month decline over the past 6 months. Granted, time adjustments are complex and each month fluctuated around 2+/-%. Sometimes when working more dated sales, a flat adjustment over the entire time period works better.

I think we are on the same page regarding not relying on global stats and using our defined neighborhood. However, if each month fluctuated around 2+/-% how can a straight-line 2% per month adjustment be applied?

 

[Mike Garrett RAA]

Not all appraisers do all things the same way and that is OK; however, there is much to be said about having conformity in how we report. Traveling to the beat of a different drummer always raises questions from underwriters.

IN MY MARKET we have experienced, in existing housing, an 6.4 % drop in the median sales price when comparing the last 12 months to the preceding 12 months. That is not true in some neighborhoods, subdivisions, and marketing areas but still provides a reflection of the present market in the Pikes Peak SMSA.

2% per month seems extraordinarily high and would be extremely detrimental to our economy which is fueled, in part, by the housing market. 24% annual depreciation is more than even the national media is reporting.

 

[Blue1]

Here I have seen a 6% drop (in some areas) in a semi-annual survey however, in SOME cases a quarterly survey reveals that most of the drop occurred between the 2nd and 3rd quarters and no drop or even and increase between the 3rd and 4th quarters but...Still down significantly from the previous 1/2 year. These kinds of stats don't translate well to monthly percentages.

'dqnet' gets its data from County assessors. I consider their foreclousre data to be fairly accurate along with the typical loan data...However, their property value stats cover too wide an area (Remember CA is a HUGE state with hundereds maybe thousands of markets). Heck they don't provide any data for my area at all.

 

[EVAUSA]

I think we are on the same page regarding not relying on global stats and using our defined neighborhood. However, if each month fluctuated around 2+/-% how can a straight-line 2% per month adjustment be applied?

Market change ranged from -1% to -5%. This was determined by 4 methods.

1st, I comparing the median price for comps Feb 1st - June 20th compared to the Sept 1st - Jan 20th. The current median for comps is $565K compared to $752K, or a change in the median of -24% over the two periods. If I look at the two periods as being 5 months apart, that is 4.8% per month, straight line. Sales activity dropped from 10 closed to 5 closed.

2nd, I check to see if there are any recent, previous arms length transfers of my comps. On this report, on of my comps sold 13 months ago, it was updated after the prev xfr and sold for 10% less, that is where I derived my 1% (reflecting the low).

3rd, I found new active listings priced 4% below the last sale 60 days ago.

4th, after all other adjustments are applied, I start plugging in time adjustments to my dated sales on the sales grid and see what tightens up the adjusted values, starting with 1%. For this report, 2% per month on sales over 60 days brought my two aging sales down in line with my recent sale #1 and the active listings.

 

[EVAUSA]

2% per month seems extraordinarily high and would be extremely detrimental to our economy which is fueled, in part, by the housing market. 24% annual depreciation is more than even the national media is reporting.

24%, heck, here's one that dropped 35% in just under 12 months!
03/16/07 PD @ $545K
02/25/08 PD @ $335K

See for yourself:
View attachment 35% drop in 12 months.pdf

This area REO driven. About 60% of the transfers in the neighborhood are to banks. 90% of the listings are REO or Short Pay. Most of the homes in the area have been illegally hacked up to accommodate multi family living. These numbers are becoming more and more frequent throughout Los Angeles, Ventura, Santa Barbara, and San Luis Obispo Counties, depending on the neighborhood.

*note to moderators, this is my info on MLS, not Realtors.