Market Conditions Analysis and Time Adjustments Dilemma

[alebrewer]

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.

So my original post - to which you disagreed - stated that all those ancillary trends are part of trend analysis. I never said 'they' wanted to see that part. Its ok to disagree, but IMO - DOM, LtoS, and concessions should all be considered in a trend analysis, as price is not the only factor that can reveal market trends.

 

[alebrewer]

When there is only a couple of listings, you probable won't see a trend lower.

That's true regardless of what metric you're trying to isolate.

 

[TerryRohrer]

So my original post - to which you disagreed - stated that all those ancillary trends are part of trend analysis. I never said 'they' wanted to see that part. Its ok to disagree, but IMO - DOM, LtoS, and concessions should all be considered in a trend analysis, as price is not the only factor that can reveal market trends.

Kind of a J Grant response there. The subject of the thread is the price trend, and specifically, what rate of change in price is occurring in the OPs market. But, it is about time to plant the garden, so lets work that in too!

 

[alebrewer]

Kind of a J Grant response there. The subject of the thread is the price trend, and specifically, what rate of change in price is occurring in the OPs market. But, it is about time to plant the garden, so lets work that in too!

I'm all for it. I'm sure Chuck could help with the tomatoes...

PS - there's no reason to be an @##, but there ya go.

 

[Mark K]

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

Don't know. I haven't used a F/F form in over 15 years. I'm just looking at what you posted.

BTW, in this area, the sales prices are at their lowest in Dec. to March, every year. Comparing the first qtr. of the current year to the second and third qtrs. of the previous year will always show declining. I think it makes sense to use similar time frames for comparison.

 

[The Bob]

Why on Earth would you go back 5 years??

the analysis FOR THE ADJUSTMENT should be based on when your comps sold. You may have higher/lower 12 month prices, but if all your comps are in the past 3/6/9 months, that's what you base the adjustment on, not on what was happening 12 months or 5 years ago.

 

[The Bob]

I'll share a real simple method.
Set the parameters for your comps; Location, Design, Year Built, GLA, Room count, etc...whatever
Do a search for those on every 30-60 day period. If you don't have sufficient sales, do the same for competing areas. That should give you a low/high./median and just compare them. Chances are you're going to have some seasonality that you need to address in commentary. You should have a pretty good idea what's happening in your market. I think it's insane to just throw a graph/chart in a report without analyzing it.
And I agree that analyzing price alone is not going to tell the full story.

 

[CGinMN]

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.

Indeed, there is no one-size-fits-all approach. Like I was saying in the other thread, you have to understand the nature of the data before you can draw any conclusions from it.

 

[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

Why on Earth would you go back 5 years??

the analysis FOR THE ADJUSTMENT should be based on when your comps sold. You may have higher/lower 12 month prices, but if all your comps are in the past 3/6/9 months, that's what you base the adjustment on, not on what was happening 12 months or 5 years ago.

Unless there is some seasonalities you are researching.

 

[shrubberyvaluation]

My point is that there are indicators. If your DOM is less than week and a shortage of supply, bidding wars etc, I'd double check if your data is showing declining. It's possible but I'd try to figure out the main reason why...