Market Conditions Analysis and Time Adjustments Dilemma

[Tom D]

This is from spark. So i do have some different charts. The micro rehab market can be different from the overall trend market. The spark chart below is from competing rehabd row homes.

 

[shrubberyvaluation]

No, i posted the most recent march fannie newsleter where they spelled out exactly what they wanted.
View attachment 98978

Id use Fannie verbiage, something about adjustments not being clearly indicated.

 

[alebrewer]

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.

I fully agree that just regressing date and price may not tell the 'real' story - or at least not the entire story - even when using a 2nd or 3rd order polynomials. DOM, list to sale and concessions all are part of the trend analysis.

 

[TerryRohrer]

I fully agree that just regressing date and price may not tell the 'real' story - or at least not the entire story - even when using a 2nd or 3rd order polynomials. DOM, list to sale and concessions all are part of the trend analysis.

While trends in sp/lp and dom are worthy of analysis, they do not enlighten the analysis of price trends.

 

[alebrewer]

While trends in sp/lp and dom are worthy of analysis, they do not enlighten the analysis of price trends.

Hmm... so if a market is slowing - you don't expect LtoS ratios to trend lower?

 

[CGinMN]

1. 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

What you have done is a very broad analysis, averaging 55 sales a month is probably too broad IMO. You have plenty of data to work with. I would define the market area boundaries, then constrain the data by relevant property characteristics and test that result.

While trends in sp/lp and dom are worthy of analysis, they do not enlighten the analysis of price trends.

You just mentioned how, depending on what subset of data you're looking at, it may say increasing or decreasing. Analyzing the trends of these secondary measures can sometimes help validate or enlighten which price trend analysis is more reasonable.

 

[TerryRohrer]

Hmm... so if a market is slowing - you don't expect LtoS ratios to trend lower?

I didn't say that. There is a reason they ask for price trends. Full Stop. Supply and demand. Full Stop. Dom trends. They are distinct measures. If they were asking for general market trends, I would agree. But in the spirit of learning, if you measure a price trend of say, +1% per month, and then notice that sales to list price ratios have been widening, how do you use that information to modify the price trend?

Easy to do in text and get away with it, but mathematically, dom has units in days, price trends are $/unit of time, and SP/LP has no units.

 

[Tom D]

Hmm... so if a market is slowing - you don't expect LtoS ratios to trend lower?

When there is only a couple of listings, you probable won't see a trend lower. And i'm still seeing 100% getting full listing price. But it can be fluctuating, not sure what is coming.

 

[TerryRohrer]

You just mentioned how, depending on what subset of data you're looking at, it may say increasing or decreasing. Analyzing the trends of these secondary measures can sometimes help validate or enlighten which price trend analysis is more reasonable.

Well, when I am considering price, I don't obfuscate the analysis by considering all other measures that are possible to consider. There are periods where prices are declining and inventories and dom are declining simultaneously. There is likely some reason they ask for analysis of these factors separately.

 

[Terrel L. Shields]

t your own market research ( unless you failed to do it ) shows stable for your subject's own comps,

Your own comps are too small a sample to be statistically significant.

You should write your reports so they can be understood by the user(s).

How do you write in crayon to an Underwriter?