How Long Do You Think It Will Be?

[George Hatch]

[What does being way out in front mean, if not before others, i.e. early since you didn't paint the top]

( So if you get out 20% below the top and I get out 20% after the top occurs, we are somehow different, money wise? Problem is you don't know when the top is, neither do I but I know when it's turned)

Wannabe property moguls? Triggered much? I'm 58 and have been moguling since my first multi-family, right out of High School, so give it a rest George. I think I have enough, investing, flipping and rehab experience to know what I'm doing.

edited to add: I've lost $$ on ONE property (35K), combinations of indecision and softening market. Had one listened to other prognosticators one would not have done the 3 deals leading up to that one.

Again, I'm STILL mostly referring to the anticipated actions of the masses and that effect on market trends, not to appraisers who are dealing with the data in real time. This discussion has *nothing* to do with a critique on your investment strategies or to suggest your strategy is stupid.

Actually, I think your own behavior speaks *exactly* to what we've been saying about the effects of the non-organic element of the supply/demand cycle. As an investor you will only buy and hold when you think there's some upside to be gained, and in doing so you are adding to the demand - above and beyond the natural demand coming from the owner-users.

Then when you see the market is softening you will jump on it to dump your inventory to limit your losses. In doing so you are moving directly from adding to the demand to adding to the supply, thus exacerbating both trends. Rinse and repeat by however many short term investors you think have been participating in the bull run and the results are inevitable.

So not only do you add to the demand on the upswing, you also add to the supply on the downside. And your actions literally change overnight.

 

[timd354]

View attachment 35478

What are you talking about Flacco? I appraised in the DC area back in 2005 and had no problem whasoever gathering listing and inventory information back in that time period, including the information required to fully complete all of the top columns on the 1004MC...in fact I used a spreadsheet that was invented by George (and graciously ditributed by him free of charge to anyone who adked for it) to help sort that the data for the 1004MC

 

[timd354]

Speak for yourself, homeboi. I personally designed and distributed to thousands of appraisers a free 1004MC tool that counted EVERY listing during the requisite time frames. For free. Even though I wasn't even using it in my work. Randolph helped me to debug it.

We were online with that tool before the form even became mandatory. For all I know, what you're using now may even be based on my original tool because some of the MLS systems adopted my tool directly into their systems.

Actually, I take that back. If your vendor was using anything based on my tool you'd have access to how many listings were active during those prior periods. I had that working from Day 1.

I personally used that tool for several years and it worked great! That tool was a great service that helped many residential appraisers in a big way.

 

[Joe Flacco]

What are you talking about Flacco? I appraised in the DC area back in 2005 and had no problem whasoever gathering listing and inventory information back in that time period, including the information required to fully complete all of the top columns on the 1004MC...in fact I used a spreadsheet that was invented by George (and graciously ditributed by him free of charge to anyone who adked for it) to help sort that the data for the 1004MC

I'm saying many still leave it blank today. But who cares about that useless form. Needs minimum YOY.

 

[timd354]

I'm saying many still leave it blank today. But who cares about that useless form. Needs minimum YOY.

Yes, many appraisers are lazy and do not fill out the form either fully or correctly. I will agree that it is a pretty bad form and the people at Fannie knew it was a not a great form from the get go because they were very limited in what they could do on the form due to tehnical considerations because Fannie's systems were extremely antiquated at the time the form was designed.

Although it sounds completey absurd and crazy today, I know for an absolute fact that the reason that the time period columns at the topic of the 1004 MC are broken down into only 3 time periods (current - 3 mos; 3-6 mos., and 7-12 mos) is that the scanners and software that Fannie utilized at the time to collect and aggregate data (nothing involving appraisals was done elctronically back then) were only capable of reading and capturing 3 columns worth of data.

The designers of the forms knew that because of the limitations invovled, the form was not very good, but they thought that at least the 1004 MC forced appraisers to provide something in support of their conclusions regarding market conditions since previous to the implementation of the 1004MC, many appraisers provided exactly zero support or reasoning for their market condition conclusions.

 

[George Hatch]

That worksheet was specific to the form. i did it because appraisers were stressed out and fretting about having to spend an hour running data and doing the calcs by hand and using averages instead of medians. With a little practice you could build a single MLS run, export it into the worksheet and get the grid populated in less than 5 minutes.

i even wrote an A-Z tutorial about how to set the exports up and use the worksheet, and distributed that, too.

But you're right, Fannie set that grid up wierd. Then again, when they designed the form there were no automated solutions for that grid, most appraisers had not been downloading and exporting data for analysis and most of them didn't even know the difference between an average and a median.

Nowadays I include a 5-yr or longer summary of overall volumes and high-low-medians for price and GLA so I can relate where we are to where we've been. I like the context that breakdown provides for the current data.

 

[George Hatch]

Yes, many appraisers are lazy and do not fill out the form either fully or correctly. I will agree that it is a pretty bad form and the people at Fannie knew it was a not a great form from the get go because they were very limited in what they could do on the form due to tehnical considerations because Fannie's systems were extremely antiquated at the time the form was designed.

Although it sounds completey absurd and crazy today, I know for an absolute fact that the reason that the time period columns at the topic of the 1004 MC are broken down into only 3 time periods (current - 3 mos; 3-6 mos., and 7-12 mos) is that the scanners and software that Fannie utilized at the time to collect and aggregate data (nothing involving appraisals was done elctronically back then) were only capable of reading and capturing 3 columns worth of data.

The designers of the forms knew that because of the limitations invovled, the form was not very good, but they thought that at least the 1004 MC forced appraisers to provide something in support of their conclusions regarding market conditions since previous to the implementation of the 1004MC, many appraisers provided exactly zero support or reasoning for their market condition conclusions.

i never knew any of that, so thanks for the explanation.

 

[George Hatch]

The MLS systems also tend to have a limitation on how many records you can download at one time, so that makes it hard to deal with the huge datasets, too.

 

[Randolph Kinney]

Okay buddy. I guess price goes up when there are more sellers than buyers then. SMH

The last 4 periods in 2017 for Price are declining, Joe.

So listings are causing the median price to decline?

If there is a shortage, you would expect periods where the volume was zero, truly a shortage.

 

[Joe Flacco]

The last 4 periods in 2017 for Price are declining, Joe.

So listings are causing the median price to decline?

If there is a shortage, you would expect periods where the volume was zero, truly a shortage.

It's not declining, Randolph. It is like that every year. Just look at it. The last 8 bars (quarters) are higher year over year. Eight straight quarters of YOY increase in price. It is increasing.

I will update the chart for you when Q2-2018 becomes available.