Overall Market Trend (Min 12 months)

[J Grant]

If median sale price is going up, then median price per SF should be going up. I don't know what is so confusing about it.

Because the price represents the total paid for teh total property and the price per sf represents one ( and often misleading ) metric of the property

In addition, they are not asking for a market condition data trend of price per SF , they're asking for a trend relating to prices. How much clearer does that need to be?

 

[robertwells]

So its possible prices have increased in the past 12 months but say yoru comps are within 6 months and the market stabilized. This would mean you do increasing because its based on 12 months even if no adjustments are warranted.

This is my understanding...

 

[J Grant]

I wish they would provide their data. There are times where different properties within the same neighborhood have different trends. A multi million dollar waterfront might trend differently than a townhouse in a community that isn't waterfront. Of course if your data shows stable but the overall trend in the census tract is increasing, you are at risk of getting hit for racial discrimination or something.

What do they need us for if they provide "their" data to us, and we spit it back to them? ( they don't, would be the answer )

We are supposed to be the market espers in our area and in the subject relevant area we are appeasing. The fact that they might vet it ( or not) against larger data sets is on their end. They know there will be a difference, one assumes. Regardless, we can not invent fears about bias or not matching their result to interfere with credible development. They just want to see support for it.

 

[J Grant]

This is my understanding...

Imo the price trends should apply to reflect the market if it changes -nor for one short month, which is less credible but at least quarterly or six months show a trend.- if the prices increased the first six months but then was stable the last six months, who would you make time adjustments for sales that were negotiated and closed within the last six months??

The sale that is 10 months old might be adjusted up for the remaining four months of appreciation until the prices flattened/stabilized..

 

[Sadie]

Doesn't matter if they are or what metrics they use -

We are responsible for our market and our analysis in our appraisal, and if we understand our market and have supported and credible reasons why we chose X or Y, we can explain any challenges they might make to our work. I have done that numerous times an never heard anything afterward, They jus wan a reasonable explanation, we can in advance try to second guess what they will do.

I am unaware of any appraiser being questioned for our market conditions adjustments or our commentary. I think it is not so much that we are spectacular (which we are), but because no one reads it.

 

[J Grant]

I am unaware of any appraiser being questioned for our market conditions adjustments or our commentary. I think it is not so much that we are spectacular (which we are), but because no one reads it.

I think they read it - and I rarely if ever was questioned as well.

Local review,, client and UW still read the comments - it seems that Fannie and freddie want a graph or chart now for support when we make a market condition adjustment. The MC form already addressed that, but they want an additional one to show support- it might do more harm than good if not done well, but that remains to be seen.

 

[Sadie]

I think they read it - and I rarely if ever was questioned as well.

Local review,, client and UW still read the comments - it seems that Fannie and freddie want a graph or chart now for support when we make a market condition adjustment. The MC form already addressed that, but they want an additional one to show support- it might do more harm than good if not done well, but that remains to be seen.

I have spoken with lenders who have had meetings/training with fannie and they don't need graphs, just a supportable explanation and some thought given to the adjustments. Some appraisers don't make adjustments or make poorly supported adjustments, which is what triggered the new guideline.

 

[Fritz in NY]

Sad state of affairs for Appraisers. If there is a .25% change in est. value, or a $ 1,000. item adjustment change, or a change in market due to rates of .025%, we could spend more time/effort than necessary to have an Estimated Value. It is or has never been an "absolute value". We can try to make it so, but why? Estimated Market Value is what our profession calls for.

 

[J Grant]

Sad state of affairs for Appraisers. If there is a .25% change in est. value, or a $ 1,000. item adjustment change, or a change in market due to rates of .025%, we could spend more time/effort than necessary to have an Estimated Value. It is or has never been an "absolute value". We can try to make it so, but why? Estimated Market Value is what our profession calls for.

I agree wrt anal petty small adjustments or changes in price - however, I do not believe that is what they are asking for. Idk why appraisers believe that to be the case, perhaps because of that one scatter chart which was used as an example for price sensitivity -Opinion of value is a better expression for appraisers than estimated value ( since value estimates is what AVM's deliver -)

 

[Sadie]

I agree wrt anal petty small adjustments or changes in price - however, I do not believe that is what they are asking for. Idk why appraisers believe that to be the case, perhaps because of that one scatter chart which was used as an example for price sensitivity -Opinion of value is a better expression for appraisers than estimated value ( since value estimates is what AVM's deliver -)

Agree. I take the examples that fannie gives with a grain of salt. Just read the guidance and avoid the pictures.