2H2022 to present the delta due to factors like condition is going to be significant in many markets. The beaters with condition or functional issues had no problem selling in the 3% rate environment. It is different when rates doubled. We are in a situation in many markets, such as TX and FL, where supply has increased to pre-covid levels and higher rates with reduced demand means that the fewer buyers out there only want turnkey properties. Those with issues are sitting for longer and many likely get pulled because the sellers were merely aspirational, or maybe they do sell at par or a slight discount. If you group all of these sales together over that period and you see what looks like stable prices, in reality, the composition of the data set changed over that period and prices based on pairs may show decline.
Seller motivation should be a consideration when looking at large data set. People die, relocate, and get divorced at similar rates throughout the year, which means estates and motivated sellers put beaters on the market at similar times throughout the year. People who can plan their sale and prepare their home for the market will put it on in that sweet spot, which in most markets is March thru July.
I think it remains to be seen what impact this will have. The lessons from the 1004MC were that A) There is no one-size-fits-all approach to market conditions analysis and B) Appraisers will figure out a way to take the path of least resistance, including concluding zero. I think retiring the MC resolves A, but how B plays out I don't know. Improving education is good, and I am seeing more focus on that. But very little focus on the fundamentals. Retirements will help because I think older appraisers are less likely adapt.
