New market analysis changes.

[Tom D]

Just because prices are down 1% in one month and up 1% in another doesn't mean prices actually increased or decreased, it could just be a variance in higher end or lower end properties selling. Yes I can explain this in the report, but it just gives more ammo for the bias police to go, oh look he didn't adjust up 1% or for the AMC to stip more.

That's right shrubby. This type of preciseness doesn't exist in real estate. It leaves you open to someone showing some different preciseness. So you have to explain away now and probable have some disclaimers, like we did with the 1004mc. Future looking brighter for anyone thinking the long run, like more than 2 years.

Follow the money, who on fannie owns a current software being recently peddled. It's seems easy to push an agenda on the idiot savants who run fannie.

 

[alebrewer]

Good post alebrewer.

And I don't know anyone or have reviewed any appraisal supporting or applying nonlinear market adjustments. And I have reviewed 1,000s of reports in multiple states, not a single one with nonlinear market adjustments. And that isn't surprising considering the concept never existed in residential education, training, or practice before the GSE missive. I disagree with you about not being applicable unless the market is highly because nearly all markets (or arguably every) experience seasonal fluctuations. Given that and the guidance, the GSEs expect to see them.

To expand on that, I agree that quite a few (heck I would say most) appraisers track their markets in a way that would be USPAP compliant. But there's more to it than that. This is just another step in the "show your work" mindset at the GSE level. It started with the push to show your work for adjustments, and it isn't stopping with the show your work mandate for market support and adjustments. We are on our way to "show your work" for everything in the report, and most are not ready even if they believe they have been doing "it" all along.

I don't disagree. The pendulum always swings too far and this is yet another example. For decades, appraisers have been used to "its this way because I say its this way", which has instilled a level of complacency WRT learning difficult concepts (regression for example) and reporting opinions in a manner that really explains the appraiser's analysis - thus forcing the user to 'assume' the analysis is correct just because the appraiser has a credential. Of course, I think this was/is probably more typical in the secondary market residential world, as banks, litigators, and estate users have probably demanded demonstrative analysis this entire time (or at least some semblance of demonstrative analysis).
So now that the data, that used to be available to appraisers only, is available to the users as well - they can do their own analysis, and are quite often finding that the appraiser's 'analysis' doesn't line up with the data - hence the edict. And - the pendulum is swinging too far. Its gonna be a mess for a minute until appraisers find that 'sweet spot' with their clients.
And I never saw in the edict where they are 'requiring' non-linear analysis - just that they're requiring appraisers to understand/acknowledge that there might be situations were non-linear analysis is meaningful.

 

[shrubberyvaluation]

That's right shrubby. This type of preciseness doesn't exist in real estate. It leaves you open to someone showing some different preciseness. So you have to explain away now and probable have some disclaimers, like we did with the 1004mc. Future looking brighter for anyone thinking the long run, like more than 2 years.

Follow the money, who on fannie owns a current software being recently peddled. It's seems easy to push an agenda on the idiot savants who run fannie.

Speaking of who runs Fannie, has Trump put someone in there yet?

 

[alebrewer]

Speaking of who runs Fannie, has Trump put someone in there yet?

he fired Chopra...

 

[shrubberyvaluation]

he fired Chopra...

Chopra was CFPB I thought, not FNMA?

 

[Non Sequitur]

And I never saw in the edict where they are 'requiring' non-linear analysis - just that they're requiring appraisers to understand/acknowledge that there might be situations were non-linear analysis is meaningful.

I wrote they are "expecting" to see them. And I stand by that statement because of what I heard at the AMC Expo, and that chart in the missive wasn't included for fluff.

 

[alebrewer]

Chopra was CFPB I thought, not FNMA?

CFPB

 

[alebrewer]

I wrote they are "expecting" to see them. And I stand by that statement because of what I heard at the AMC Expo, and that chart in the missive wasn't included for fluff.

Meh - as I say all the time: Everyone's got to do what they think is correct. Time will tell. I expect non-linear time adjustments will spin u/w's heads off - just like inconsistent GLA adjustment factors. Give it 2-3 months - folks will figure out what is expected and provide services that adhere to the lowest level of expectation and acceptance. I strongly believe folks who frequent this forum (or another like it) will adapt more quickly, just because of access to information.

 

[Non Sequitur]

Meh - as I say all the time: Everyone's got to do what they think is correct. Time will tell. I expect non-linear time adjustments will spin u/w's heads off - just like inconsistent GLA adjustment factors. Give it 2-3 months - folks will figure out what is expected and provide services that adhere to the lowest level of expectation and acceptance. I strongly believe folks who frequent this forum (or another like it) will adapt more quickly, just because of access to information.

My bolding.

Don't speak it into existence! All jokes aside, that is an advanced concept I haven't thought about for years. A former Forumite used to beat that drum incessantly for years and taught classes promoting the practice. Memories.....

 

[shrubberyvaluation]

My bolding.

Don't speak it into existence! All jokes aside, that is an advanced concept that a former Forumite used to beat that drum incessantly for years and taught classes promoting the practice. Memories.....

I've done it. Just like you wouldn't adjust the same for baths in a 3 bedroom 10 bath home, you might adjust differently for a home with larger than typical GLA or lower than typical GLA to the point that it is in the expected range for the market.