Market areas and Market Trends

[Fernando]

Appraisers don't usually see a significant trend within past 6 months unless it was like right after Great Recession started.
I saw it dropped and warned my mortgage brokers to hurry up and refinance before the home prices drop even more. And it did.

When I look back at home prices past 2 years, I was surprise market in general was stable and even down at times. High mortgage rates had effect on prices.
Even now, it's difficult to see if prices are going up or down, thus best not to do market adjustments and stick with more recent comp sales.

 

[djd09]

now if we start into predictive appraising...time adjustments would be necessary

 

[CGinMN]

Comp 1 was a new construction with generic photos, I would want to confirm quality. Comp 2 was a 2 story. Then you have some C2s. I didn’t look at them all but if I had to guess, looks like prices increased over the first part of 2022, stabilized til early 2024 when they went up a bit. But you can’t just look at a data that is only constrained by geography when analyzing price trends. You have to put some physical constraints on the data because, as I’ve discussed many times, the physical composition of the sales change throughout the year.

 

[djd09]

it is kind of like climate data...which point to start from

 

[Fernando]

Appraisers were taught to look at past sales in determining value.
Do stock buyers look at past prices in buying. It's current available information and expectation of the future outlook which determine the stock prices.
Appraisers need to not only look at the past but current market activity and sentiment much more important.

 

[Terrel L. Shields]

Comp 1 was a new construction

Every single one of them is new construction

 

[CGinMN]

https://www.realtor.com/realestateandhomes-detail/913-Rachel-St_Gentry_AR_72734_M92932-34174

10/12/2021

Sold

$239,900

https://www.realtor.com/realestateandhomes-detail/2112-Carlisle-St_Gentry_AR_72734_M91298-36910

07/07/2021

Sold

$218,000

 

[Terrel L. Shields]

OK some early Covid flips

 

[sputnam]

now if we start into predictive appraising...time adjustments would be necessary

Predictive appraising has always been part of the professional appraiser's bag of tools. Only, we call it.... a prospective value.

 

[Jayjay25]

I'm convinced no one at the GSE's know anything about real world appraising.

Just did another one today where there appears to be a clear outlier on a damn near model match on a conventional purchase. About 20% high IMO. I have to wonder if a waiver was done. Now my borrower who is refinancing will undoubtably have seen this. So now I have 1 sale 20% high and 2-3 other sales more in line with what the market really is. The data cancer that the GSE's have created are really screwing this market up.

This is absolutely the reality of what’s happening to prices in the current market. We are 100% inflated by appraisal waivers and it’s about to get worse. For all those properties that don’t qualify for waivers don’t forget to make a positive time adjustment! Have you ever noticed that Fannie/Freddie doesn’t stress the necessity for market condition adjustments when values are declining? Wanna see a magic trick? Start marking negative time adjustments and watch all your clients disappear.