One Unit Housing Trends - How long a period?

[Mike Garrett RAA]

It doesn't matter what they don't want to see, what is important is that you report factual data in a not misleading appraisal report. If you conclude the market is declining, support your conclusion and report it.

What constitutes a market in decline? Are we talking about declining values or a trend which could lead to declining values?

My market has all the symptoms...inventories of listings expanding, days on the market expanding, building permits off by more than 30% from last year, and numbers of sales have declined; however, property values still increased. So, what is the market? 75% of the appraisers I know are reporting it as Stable and urging cautious optimism. Interest rates are still at historic lows. New construction is still occurring. Unemployment is at a 10 year low. Major military expansion is under way, and there will be substantial increases in troop strength over the next two years.

So, how would you report MY MARKET?

 

[Richard Carlsen]

I heard that Lenders do not want to see in the report Property value trend is "declining." Is that correct?

The consumer end of the lending industry (LO's, MB's, etc.) don't want to see "declining" marked on an appraisal report since that automatically changes the LTV ratios on the loans permitted (if at all), making it harder for financing or refinancing.

But like Mike said, what they like and don't like is immaterial. It is what it is and it is our responsibility to tell them what we think it is.

BTW, welcome.

 

[murray stroupe]

RE; Trendline work

It depends

Some markets exhibit seasonal fluctuations in volume and sometimes price. I think it appropriate to go 24 months in these cases. Many SFR markets have a surge of buyers just before the school year starts. If I go 6 months including July/August in that type of market...what is it going to do to my trend?

Data sample I use is defined by school district primarily, the neighborhood boundaries if enough data, price segment if not. Density in my market area allows some flexibility there. Methodology disclosed with enough detail that someone else could reproduce results.

As was pointed out to me elsewhere. The checkboxes I am providing support for are in the NEIGHBORHOOD section.

For the pic below:

Are values declining?
How about if I add 1 more qtr before it that is consistent with the series pattern (ex: $4.6million volume, $294k median)? What does that do to the trendline? Stable or declining?

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Yes,declining mostly, cant read the numbers[when enlarged] , but trend-line came in clear
Cant comment on 2nd question/July/Aug trend, could if i could read the numbers.
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