Market Conditions Analysis and Time Adjustments Dilemma

[Tumbuktu]

I submitted the following chart (Median Close Price VS Primary Year) for 'Market Condition Analysis'

• Three Miles Radius was chosen to get enough statistical sample (3365 properties)
• Stats of Year 2025 only consist of Jan to Mar & few days of April (based on 116 properties)
  • I find this chart inconclusive
• I based my analysis mainly on Year 2024
  • Price decreased from $485,000 to $480,000
  • $5000 decrease is around 1%
  • This is too small a decrease so I considered it Stable

I get the following Revision Request
There is a conflict, Chart shows 'Market is Declining' whereas appraiser has marked it Stable

I have following questions

1. If such a stringent standard is applied, then no market can ever be marked as stable (even $1 difference in either direction would put it increasing or declining). In the current case, if at the end of 2024 the price was $486,000 then the market is increasing and $484,000 would put it declining
2. How much data is considered reliable.
   1. In the current case 3 miles radius yielded 3365 properties [3249 properties for 4 years (Jan 2020-Dec 2024)] if we exclude the few months of Year 2025

As always guidance is feedback would be appreciated

 

[J Grant]

Why are you falling for charts and mass data gimmicks instead of doing the research and trusting your own reach of the smaller set of relevant comps?

Tht kins of mass data statistics leads to problems as you see. Teh GSE's should walk back that horrible TRue Tract heat map example they gave- it sent appraisers out in all kinds of directions with unintended consequences. 4 years, 3,365 properties ?? Why is that mass of data far back in time relevant to our subject problem of the past year of more similar limited data of properties?

If the chart concluded declining but your own market research ( unless you failed to do it ) shows stable for your subject's own comps, then change it to stable because the later set of data is less reliable.

 

[Tom D]

Your stuff is way overhead of any reader, including myself. Way to much un needed info, i started to phase out. Here is what i use, so simple a civilian can understand it. I also have other macro & micro market data. Remember, i do urban row homes which are very similar in each neighborhood. seen 1, seen them all.
This shows a non linear time line, which when fluctuating doesn't necessarily mean increasing. But with a linear time line you got a straight up line. Kinda a false flag. I like the word fluctuating cause not increasing in every area around here, and some going down, some mixed up so who knows the future trend. Your chart looks downhill.

 

[Mark K]

If I was to include Jan-Mar '25, I'd compare it to Jan-Mar '24 for trending purposes.

However, your graph indicates declining pretty obviously. Small amount year to year, but you should have expected this revision request. By your graph, its been declining since 2022. I'd mark the box declining and explain.

 

[alebrewer]

Your stuff is way overhead of any reader, including myself. Way to much un needed info, i started to phase out. Here is what i use, so simple a civilian can understand it. I also have other macro & micro market data. Remember, i do urban row homes which are very similar in each neighborhood. seen 1, seen them all.
This shows a non linear time line, which when fluctuating doesn't necessarily mean increasing. But with a linear time line you got a straight up line. Kinda a false flag. I like the word fluctuating cause not increasing in every area around here, and some going down, some mixed up so who knows the future trend. Your chart looks downhill.

View attachment 98977

I like this, but don't the GSE's expect a monthly analysis, Tom? IOW - if you look at their guidance, it appears they want the appraiser to quantify monthly deltas over at least a 12 month period. Have you had any pushback for lumping the data into quarters?

 

[Tumbuktu]

Small amount year to year

Aren't they asking for last 12 months/one year?

 

[TerryRohrer]

Aren't they asking for last 12 months/one year?

The trend in the neighborhood is to be based on data from the past 12 months from the subject neighborhood. Preferrably relying on data comparable to the subject, and if that is insufficient, relying on all data from the subject neighborhood. But the adjustments in the grid will necessarily be based on the trend during the time frame during which your comps went under contract through the effective date. So, your neighborhood trend can be downward while you make no adjustments to sales from recent months. I'm working on one now where the trend is slightly up or slightly down, depending on what subset of data you are looking at, and the most recent sale in the area is two months old but is not highly comparable to the subject. I don't plan on showing any graphs and will simply explain what I saw and what I concluded and what I did.

 

[DWiley]

There is neither a requirement nor an expectation for monthly analysis. Appraisers should not force a monthly analysis when there is insufficient data for monthly analysis. The time segments used for market analysis should be based on the data available in the subject's market area.

 

[Tom D]

I like this, but don't the GSE's expect a monthly analysis, Tom? IOW - if you look at their guidance, it appears they want the appraiser to quantify monthly deltas over at least a 12 month period. Have you had any pushback for lumping the data into quarters?

No, i posted the most recent march fannie newsleter where they spelled out exactly what they wanted.

 

[shrubberyvaluation]

You should write your reports so they can be understood by the user(s). You should not include something that would confuse the user(s) or if you do explain it further. I would say stable unless there are other factors showing a declining market. Longer DOM, newer comps are adjusting lower without market condition adjustments, oversupply. It's hard to tell based on 1 percent, it could just have more higher end homes selling earlier in the year.