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Overall Market Trend (Min 12 months)

Just addressed in another thread:


Now that it has been clarified that "overall trend" is the YoY trend, has there been any discussion on what is stable? Would you say 3%+/- change year over year could be reported as stable? We should also discuss what is undersupplied, balanced, and oversupplied.
 
No listings, under supplied. But price still could be going up because of more buyers than listings in a downturn.
A lot of zeros on the trend line stable, but even in my urban areas there can be different market trends in a zip code, and within those zip codes different micro trends
I look at the general then go down to the micros. My MLS does a pretty good job of the macro trends, but i have my own excell charts for the neighborhood and then the specifics of different activities going on, like gentrification (bad word).

So there is no simple answer, although a lot of appraiser do the easy simple. Good appraisers separate themselves from the other dopes in our field.
 
No listings, under supplied. But price still could be going up because of more buyers than listings in a downturn.
A lot of zeros on the trend line stable, but even in my urban areas there can be different market trends in a zip code, and within those zip codes different micro trends
I look at the general then go down to the micros. My MLS does a pretty good job of the macro trends, but i have my own excell charts for the neighborhood and then the specifics of different activities going on, like gentrification (bad word).

So there is no simple answer, although a lot of appraiser do the easy simple. Good appraisers separate themselves from the other dopes in our field.

Nice job exploring the relationship between supply and demand and price trend.

In your opinion is the price trend tied to supply and demand? For example, is it possible for the market to be undersupplied with a stable price trend? Or oversupplied with a increasing price trend?

I would say no listings doesn't necessarily mean undersupplied. When you have more demand then supply is undersupplied. Low listings with low demand would be a balanced market. But then are we using nominal demand or effective demand for the measure of supply and demand?
A lot of questions to answer.
 
View attachment 96171

I never used this before but I took a look at it after the poster in the other thread posted their datamaster screenshot.

Now going into the spring market, this is showing a 10% negative adjustment from July / August to today. That is not what is happening.

I think there is a good chance they are going to end up backtracking on this quickly if their objective is that fewer appraisals are going to be less than contract price.
Started trying to re-model it, but gonna take too long relative to the time I'm willing to spend but...

1738684639005.png

If you removed these observations, I think you'd have a flatter exponential curve.
 
It's not about how I want to do it, the GSEs are asking for a PRICE trend
They are not asking for price per SF trend-

Price per SF is like basing the worth of a person on how many lbs they weigh- which might be a metric for some studies but does not address education, morals, income, or anything else about a person.
Price and PPF model the same thing, so long as your argument is clearly articulated. PPF represents the 'price' of the sale just like 'sale price' does. You can visualize this by recalling grocery store pricing - they display both the 'sum' price as well as the 'price per unit' - both are actual - REAL - prices. They're just quantifying different aspects of the item being priced. One reflects the price as the sum of all parts and another expresses the price on a per foot basis. Both reflect 'price'.
 
What excel program is that?
Several sensitivity type Excel routines have been published here before - I'll add this one from a poster years ago. Had to be zipped as site won't open xls files per se.
Would you say 3%+/- change year over year could be reported as stable?
When the long-term trend line is up 3%, then the term "stable" would refer to the second derivative, wouldn't it? So, the question of "stable" is either crouched in the ordinary rise one expects in an inflating economy, or it means only the departure from that trend line represents declining or increasing.
 

Attachments

Price and PPF model the same thing, so long as your argument is clearly articulated. PPF represents the 'price' of the sale just like 'sale price' does. You can visualize this by recalling grocery store pricing - they display both the 'sum' price as well as the 'price per unit' - both are actual - REAL - prices. They're just quantifying different aspects of the item being priced. One reflects the price as the sum of all parts and another expresses the price on a per foot basis. Both reflect 'price'.
Agree with a big fat but ( not butt lol )

The but is ....the sum total price is what gets rung up at the cash register, and the sum total price is the price that gets recorded on the closing date , and that is the price the GSE's want to be analyzed.

Buying RE, of course, is subject to many more influences than a point-of-sale grocery item - financing, motivation, quality, fixed location Walk into any one of 40 stores in an area and buy any one of thousand interchangeable apples or detergent pods - and who cares it is low-cost item even if one overpaid by .50 cents. Contraxt that to there might be only five properties similar to the subject in an area at any given time,, and each subject is unique.
In addition, the Price per SF is only one metric of why X property is more valuable than Y property . A smaller property in a great location is worth more than a larger property in a different location. Jow much of the value is in SF and how much due to location? In the total sum price, it is not broken out, making the price a more reliable metric when analysing price trends are the request.
 
When the long-term trend line is up 3%, then the term "stable" would refer to the second derivative, wouldn't it? So, the question of "stable" is either crouched in the ordinary rise one expects in an inflating economy, or it means only the departure from that trend line represents declining or increasing.
Definitions of terms the GSEs have been using (and appraisers have been debating) for decades without definitions would be useful. Actual definitions would imply how to measure and rate such things. Of course, those are unlikely to be forthcoming as the GSEs want to report on how superior any method other than appraisers is in "accuracy" (with no accompanying definitions). Liars gonna lie!
 
Price and PPF model the same thing, so long as your argument is clearly articulated. PPF represents the 'price' of the sale just like 'sale price' does. You can visualize this by recalling grocery store pricing - they display both the 'sum' price as well as the 'price per unit' - both are actual - REAL - prices. They're just quantifying different aspects of the item being priced. One reflects the price as the sum of all parts and another expresses the price on a per foot basis. Both reflect 'price'.
I recall reading a really good breakdown in an appraisal report back in my AMC days. The subject was a condo, and the 1004MC data showed an increasing trend in median price. However, the report also included analysis that showed that the increase in median price was driven primarily by the fact the median unit size in the more recent time period was significantly larger than in the earlier time period. The report also had analysis of the trend based on PPSF, which was stable. It as a great example of actually analyzing the data rather than just pumping the data into an app and crunching out a numerical result.
 
However, the report also included analysis that showed that the increase in median price was driven primarily by the fact the median unit size in the more recent time period was significantly larger than in the earlier time period.
Running a curvilinear/3rd order analysis of PPF can also give you the point at which you start to experience diminishing returns. Generally speaking, this wouldn't be something an appraiser would undertake, but might be a great analysis if you're on either end of the market preference for GLA. This kind of analysis might provide support for differing levels of GLA adjustment within the SC analysis.
 
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