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Market Condition Discussion

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David Dietz

Thread Starter
Member
Joined
Oct 30, 2006
Professional Status
Certified Residential Appraiser
State
Florida
We all know casual discussion with neighbors, friends and the general public about property values can get you in a fix but what about market condition discussion. What are if any the ramifications of discussing oversupply, foreclosure rates and the effect on the general market.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Nothing wrong there I know of... except getting those neighbors, friends, and the general public ticked off at you.
 

Kali the Boston Terrier

Senior Member
Joined
Jul 7, 2003
Professional Status
Certified General Appraiser
State
Michigan
The problem is the public has a general disconnect, or a lag from the real data. I can remember a time a year ago in the Detroit area, when people really still thought the market was increasing. Yet for the better part of the 2 years before that I had been measuring siginificant declines in all markets and adjusting accordingly, even then we had a 19-24 month supply of homes in every market. Now you can hardly find a person in Detroit who does not know that the market is decreasing, and for the most part accepts it as reality.

But that took a few years of actual declines before the public accepted it. What I feel bad for is all the appraisers on this board and appraisers in general that are located outside of Detroit, that are seeing their markets drop, the same thing we saw 3 years ago. Until the market catches on you are the bad guy, and many appraisers are fearful of their workload being that bad guy. Yet I can say from personal experience I am just as busy now as I was three years ago when everything started melting, and I have never been afraid to say its declining, adjust downward...and really tell the world what is happening.

Just have faith its ok that the market is declining, in a little awhile people will really want to know how bad it really is.
 

Scott Lanz

Member
Joined
Dec 13, 2002
Professional Status
Certified General Appraiser
State
Minnesota
It's interesting how much power public perception has on the real estate market.

I have had three conversations on projects in the last six months were I told the developer they are about 4 years behind.

Unless, of course, they are seeing something I am not and we are coming out of the down cycle (personally, I don't think so yet).

I think you can talk all you want about market conditions. I use the term "price" instead of "value" when talking numbers/trends.

Scott J. Lanz
 

Kevin Keck

Junior Member
Joined
Jun 2, 2006
Professional Status
Certified Residential Appraiser
State
Ohio
Learning from Detroit

The problem is the public has a general disconnect, or a lag from the real data. I can remember a time a year ago in the Detroit area, when people really still thought the market was increasing. Yet for the better part of the 2 years before that I had been measuring siginificant declines in all markets and adjusting accordingly, even then we had a 19-24 month supply of homes in every market. Now you can hardly find a person in Detroit who does not know that the market is decreasing, and for the most part accepts it as reality.

But that took a few years of actual declines before the public accepted it. What I feel bad for is all the appraisers on this board and appraisers in general that are located outside of Detroit, that are seeing their markets drop, the same thing we saw 3 years ago. Until the market catches on you are the bad guy, and many appraisers are fearful of their workload being that bad guy. Yet I can say from personal experience I am just as busy now as I was three years ago when everything started melting, and I have never been afraid to say its declining, adjust downward...and really tell the world what is happening.

Just have faith its ok that the market is declining, in a little awhile people will really want to know how bad it really is.

Brian, I am curious. Did you typically see a period of increased inventories before you could measure the decline in price in your markets? If yes, can you estimate or recall how long increased inventories were maintained prior to measurable declines? I am currently seeing inflated inventories in most of my markets but in some markets I can't yet measure any decline in price.

Thanks.
 

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
It is like anything else. Get as much data as you can, analyze it, and keep the good and either throw out the bad, or if needed, address it. I've had owners tell me point blank that there are a couple of dozen houses for sale in their development and none can sell, so the community ordered the removal of all "for sale signs". I already had the data through the MLS, but hearing her stories on a neighbor who had one offer, thought it too low, and is now trying to sell $20K lower, lends toward reading the market and gives me questions to ask the real estate agents when I call them regarding the listings and sales.
 
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