Overall Market Trend (Min 12 months)

[Tom D]

Liss believes the new mandated time adjustments have the ability to bring “tens of thousands” of homeowners back to the market.
The FHFA report comes as the appraisal industry has been plagued for years by accusations of racial bias.

The perceptions, not the reality, are being set forth to permanently kill appraisers, you bunch of low balling racists. Yes, set forth by those honest money making w$hores.

 

[J Grant]

do listings and pending sales tell the same story as the chart or graph?
If the chart trend says increasing prices, but DOM are longer for listings and they are getting price reductions in the relevant property type and market area, then what would the appraiser do ? Or just data dump the chart in and not take a second look?

 

[Tom D]

The new none linear time charts from spark talked about the different ways to look at the statistics, then pick what makes sense. Wha da, now we are rocket scientists. I think most of us are, from past times, not to be too quick about up or down adjustments.

On youtube see time line rocket science. But no pay raise.

Spark Spotlight: Updated Market Conditions (aka Time) Adjustments​

 

[sputnam]

As usual, appraisers are overthinking and over reacting to a requirement that is what all of us should have been doing all along. It's easier to apply a 0.5% per month market adjustment when you have data that indicates that prices increased 6% during the year. It's also sloppy and likely to be inaccurate. It's not much of a stretch to understand that all of the 6% increase may have occurred during 6 or 3 or even 1 month during that year. The linear adjustment is general. The GSEs now want us to determine the appropriate adjustment for eact sale... and to include an explanation of the support for that adjustment. Which is exactly what we should have been doing anyway.

 

[J Grant]

As usual, appraisers are overthinking and over reacting to a requirement that is what all of us should have been doing all along. It's easier to apply a 0.5% per month market adjustment when you have data that indicates that prices increased 6% during the year. It's also sloppy and likely to be inaccurate. It's not much of a stretch to understand that all of the 6% increase may have occurred during 6 or 3 or even 1 month during that year. The linear adjustment is general. The GSEs now want us to determine the appropriate adjustment for eact sale... and to include an explanation of the support for that adjustment. Which is exactly what we should have been doing anyway.

That is not what they said. They said they want to see proof /support for the market condition adjustment when one is made. The support is a chart, graph, and narrative, as well as showing DOM and current listings. All of it is support, the change is they are asking for an exhibit such as a graph or chart now.

The scatter graph freddie showed as one example, that each sale might be adjusted at a different percentage. IMO is overly granular and any one month can spike or lower due to one or more high or low sales. The program that produces that chart as part of Spark does it from a heat map, which the appraiser populates with data and IMO it is very difficult to populate the data in a meaningful way wrt how large the area should be, since borrowers do not pick out properties per a heat map but rather by a market area which can include a geo area or exclude it on a heat map.

We should have been showing support for an adjustment for market conditions all along, and most appraisers were. This seems an attempt to get the time frame within one year rather than year over year, and still, some appraisers are making references to 5 years ago and 8 years ago here. It opens up Pandora's box where appraisers will run off charts or a graph just to fulfill the requirement and not understand if it applies to a subject market or if the data populating the proof had any reasonable relation to being a comp .

 

[Joe Flacco]

You have to look at real estate data year-over-year. You can't analyze real estate data without considering the time of year. It is not how many months ago, it is what month, what quarter, or what season.

There was a poster that used to come on here without fail every winter talking about how prices are starting to decline in their market. I don't know why but she was never able to grasp seasonal impact on the data and why the data is like that.

 

[Joe Flacco]

This isn't going to turn out the way they think it is. Especially if they want 12 months of data. If that is what they want, they are basically saying they want the 1004MC in chart form with monthly data instead of 0-3, 4-6, 7-12 periods. It will have the exact same issues as the 1004MC.

 

[shrubberyvaluation]

As usual, appraisers are overthinking and over reacting to a requirement that is what all of us should have been doing all along. It's easier to apply a 0.5% per month market adjustment when you have data that indicates that prices increased 6% during the year. It's also sloppy and likely to be inaccurate. It's not much of a stretch to understand that all of the 6% increase may have occurred during 6 or 3 or even 1 month during that year. The linear adjustment is general. The GSEs now want us to determine the appropriate adjustment for eact sale... and to include an explanation of the support for that adjustment. Which is exactly what we should have been doing anyway.

What I find sloppy or innacurate is when GSEs or other entities use an entire zip code or even worse a census tract for market condtions or other factors to push back on my data which is of comparables.

 

[Tom D]

Right on Shrubby, CU is based on census tracts. If you wonder why their comp choices are off, CU doesn't know any neighborhood boundry line or what st not to cross over.

I have 4 seasons where the weather affected sales. However, that seemed to diappear when interest rates kept dropping and values just keep going up. 3% rates were never seen in this county. And the fed again couldn't see when to stop it.

 

[J Grant]

You have to look at real estate data year-over-year. You can't analyze real estate data without considering the time of year. It is not how many months ago, it is what month, what quarter, or what season.

There was a poster that used to come on here without fail every winter talking about how prices are starting to decline in their market. I don't know why but she was never able to grasp seasonal impact on the data and why the data is like that.

Wrt year over year - it not what the GSE's require - if an appraiser wants to additionally talk about it then do so, however, it has no real bearing on making time/market condition adjustments from comps that typically sold within the past year up to today's recent market trend indicator and making prices equivalent from past month sales if they have been changed in the market since their contracts were negotiated..

It does bring up an interesting point, though if a comp is 18 months old, then it would make sense to analyze that older sale date prior on a situation-by-situation basis.