Market Conditions Relative To Effective Date

[Peacemaker]

Ra
Because there are so many pending sales, I'm rather certain the actual median selling price won't differ much from the respective list prices.

Before I'd say if I agree with you here I'd want to know what are the days on market for the pendings, vs the closed sales. Are you saying you are seeing signs of increased market activity, albeit at a reduced price, in the pendings as opposed to the closed sales? If the pendings went under contract in say, less than 30 days (after the last price reduction), and the closed sales took 120 days to get a contract (after similar reductions), then you could be able to make a case that there are SOME SIGNS that the market leveling out. But that's way different than calling it stable. You've also got to consider the inventory still out there. You also need to consider that some markets are seasonal and be certain that your upswing in market activity (if that's what it is) isn't just a normal fluctuation (not that anything is normal right now...) Also I have to wonder how many realtors will look at the closed sales and say, "great I've got to price this at $80K now, after all those closed sales at $85K." Really who knows what next month will bring? Are you that sure that you want to hang your hat on unsettled sales?

I think you'd be going out on a huge limb to call what you've described so far 'stable.' If you want to go into a (data supported) dissertation about how you think the market may be stabilizing, what the numbers are showing you, that's up to you. But I also have to ask: if you can't get a bunch of appraisers to understand and agree on what you are saying what do you think a lender will think when they get a hold of that?

 

[Pamela Crowley (Florida)]

ZZ, it looks like you are trying to spin a declining market to make it sound like a stable market.

 

[Randolph Kinney]

ZZGAMAZZ,

If you are looking for the dynamic that will describe an inflection point, that is a change in direction, you should be looking at a month by month basis for how many sold with median price and exposure time, how many new listings came on market with total inventory and marketing time.

Pendings are neither sold nor active listings. They can go either way; drop out of escrow and back on market; or close escrow.

If the rate of sold is less than the rate of new listings, your inventory is growing (obvious). If your rate of sold is greater than new listings, your inventory is shrinking (obvious). Any one month does not make a trend.

If you make a series of graphs by month of 1) sold median price, volume, exposure time 2) listings median price, volume, marketing time 3) new listings median price and volume for the month, you will see if inventory is growing, if days on market growing, if median prices are changing.

It is a lot of work but if you want to call it that close to where prices may have stabilized, that is what you have to do.

If you look a total listings as of the effective date, even if the days on market at that point is less that days of exposure time for sales, that won't tell you anythng because they have not aged enough to be sold. If on the other hand, days on market is greater than exposure time for sales, it tells you the market has stalled waiting for the next price shift down.