• 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.

Market areas and Market Trends

They made good observations with regards to seasonality. One of the main issues with the way most appraisers apply market conditions adjustments is annualizing the change in value and applying it on a per month basis. This technique does not reflect what occurs in the market.
 
quit confusing time adjustments with over priced waiver purchases... :ROFLMAO:
 
1733588513361.png


If you look at these months that the prices actually increase, the price change for the year is mostly occurring in 3-4 months of the year. Looking back at the data, it is always obvious that the adjustments should have been made. It is no different above. What people don't seem to understand is that in real time, those lines are lagging around 2 months, just like closed sale comps. The point on the line is published for the correct month but it is two months behind. Once it gets over that spring bump and you have spring sales, the adjustments are obvious. So we get the spike in appraisals under contract price during those months.

So understanding the above, the only way to more accurately reflect market conditions is to anticipate the change in values. But at the same time, you also have to have some evidence or reasoning for why you anticipate the change in values. The only way to anticipate the change is to keep close eye on the supply and demand.
 
Last edited:
Personally, I think the development and release of the 1004MC was a big missed opportunity for market conditions education. Everybody is pointing fingers at us now but clearly the GSE's never understood how the market operates either as evidenced by the 1004MC form and other past publications.
 
The main challenges with market conditions analysis in real time are

1) Seasonality - most of the price gains occur in the spring and spring follows winter, a low activity season.

2) Segments - not all segments are doing the same thing. You can look at bigger group data like state or county and the monthly trends are obvious, but when you go smaller to zip codes or smaller, you have less data and price info can swing wildly looking at monthly. Even if you group it quarterly it can still swing wildly.

3) Data lag - you have the gap between contract and closed, then the aggregators have a lag in compiling the data. Data is 2 months behind when most of the price change for the year occurs in 3-4 months of the year.
 
But in many markets I work, the annualized change is only 4%. So, even if 75% of that occurs in March-June, the max time adjust is a mere few thousands. $300,000 is $9,000 in that period. A 30 or 40 day comp hardly moves the needle even in peak increase times.
 
Terrel L. Shields said:
But in many markets I work, the annualized change is only 4%. So, even if 75% of that occurs in March-June, the max time adjust is a mere few thousands. $300,000 is $9,000 in that period. A 30 or 40 day comp hardly moves the needle even in peak increase times.
Click to expand...

It does move the needle because reflecting seasonality, that 30-40 day comp would be adjusted up 4%, the same as all the sales coming before it.
 
djd09 said:
quit confusing time adjustments with over priced waiver purchases... :ROFLMAO:
Click to expand...
huge non-reported story in RE now is how waivers have inflated the market.

It will be painful when the collapse hits. Glad I’m not one of the snake oil pushers that have been advocating for these products. Although I assume most of them plan on being retired by then, or will be forced into retirement when the **** collapses.
 
chad hampton said:
It will be painful when the collapse hits. Glad I’m not one of the snake oil pushers that have been advocating for these products. Although I assume most of them plan on being retired by then, or will be forced into retirement when the **** collapses.
Click to expand...

i am estimating 80% of the market since the start of the scamdemic and the explosion of waivers are underwater...
 
djd09 said:
i am estimating 80% of the market since the start of the scamdemic and the explosion of waivers are underwater...
Click to expand...
Who was president at the start of the "scamdemic"...:)
 
You must log in or register to reply here.
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
Back
Top