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Question about comps & pendign sales

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Thread Starter
Senior Member
Dec 6, 2005
Professional Status
General Public

I have questions lately, lots of them, too. Here's one now.

We at Adept Appraisal do, and include, some very specific market analysis in every report. (One example pasted below.) It's mandatory under my regime of terror, or you don't work for me, as I'm anal and like to know what's going on with the markets in which we appraise.

That being the case, I am noticing a very scary trend, at least here in Illinois. Please let me know if this trend exists in your area, if you do this sort of thing.

What I am noticing is a galactic lack of PENDING sales. I mean, almost nothing.

I attribute the trend to the obvious lack of available funding options (leading to less buyers and refi's), and also the paralysis of so many people being upside down. However, having said that, and *if* I'm right, doesn't this breed two specific problems for us in the very near future?:

1. We'll have, oh, a handful of comparables, at best, and that kicking in very soon.

2. With picky lender guidelines, this will result in a miserable report more often than not, and fewer loans being done (both for refi and purchase).

This all means even less work for us, no? At least for a little while, anyway.

Below is what we do in our reports in order to derive market data. Please, this is just for your consideration you don't have to like it, love it, hate it, or anything. It's just what we do, and only because I am anal:


2 Year Historical Neighborhood Market Study

General market conditions are stable in the Subject market area, with a predominance of conventional loans with some FHA and VA activity present. A diminishing variety of mortgage financing is available as of the past 6 months or so, resulting in fewer people qualifying for residential mortgages. Seller financing is more common as of late, and seller concessions of a few thousand dollars are not uncommon, resulting in lower net sales prices. The following figures were developed by examining all sales within a .65 Mile Radius of the Subject property, thus including most of the desirable near downtown area's market influence and figures. The Multiple Listing Service of Northern Illinois (MLSNI) reports an Average Single Family Home Selling Price of $247,930 in the Subject market area from November 16, 2005 to November 16, 2006, with a Median Selling Price of $224,950. The same figures from November 17th of 2006 to the Present were $251,596 and $224,900, respectively.

These figures demonstrate a Yearly Average Increase of 1.48%, with the Median remaining the same. This indicates a stable market as of the 'Effective Date' of this report.

The Average Marketing Time for Single Family properties in the Subject Market Area was 138 days during the most recent time period, as opposed to 78 days in the former period. The Average time on the market for Active Listings is currently at 204 days, with none of the 58 sales 'Pending' as of the 'Effective Date' of this report.

After thorough analysis the Appraiser believes the following figures to be accurate with regards to estimated 'Marketing' and 'Exposure Time' for the Subject within its stated Market Area:

Marketing Time = 200 - 250 Days
Exposure Time = 110 - 170 Days

Definition of 'Marketing Time'

The time it takes an interest in real property to sell on the market after the date of an appraisal.

Definition of 'Exposure Time'

The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based on an analysis of past events assuming a competitive and open market. Exposure time is always presumed to occur prior to the effective date of the appraisal. The overall concept of reasonable exposure encompasses not only adequate, sufficient and reasonable time but also adequate, sufficient and reasonable effort.


Anyway, your thoughts on this situation would be appreciated, and if I am wrong I'd enjoy the encouragement of an argument as to why. I'm a little more than concerned, however, as I'm seeing this pop up with greater and greater frequency.

Thanks in advance,



Elite Member
Nov 12, 2007
Professional Status
Certified Residential Appraiser
Many areas in this region have had very little activity (contracts) since the lending crisis started at the end of July. Comps prior to that are basically worthless as there was a spike down when the funds dried up. Very little recent data to go on, but plenty of listings, at least the listings are telling us what properties are not worth...

c w d

Senior Member
Oct 2, 2006
Professional Status
General Public
Yes, pending sales are far and few in a lot of areas. Supply is up, demand is down. Why? Well, people don't want to buy a home for more than it'll be worth in the near future or in the long term should the market continue its downward trend. Financing is impossible for a lot of people these days who would have qualified under more lax programs that allowed stated incomes, lower credit scores and higher debt/income ratios. Some people depended upon appreciation to continually refinance in order to keep the homes they purchased under the lax rules in the first place. Now that these folks are unable to get further financing and if they do are finding they owe more than the home is worth and are defaulting on their loans and losing their homes. Those that can negotiate with the lenders in order to maintain what is left of their credit are selling their homes at liquidation value. Homes of people who outright default are also entering the market further adding to supply and suppressing market value as most lenders are selling for below market value due to their high level of inventories on their portfolios which adversely affect their ability to get financing themselves to continue to loan money on homes.

It's a vicious cycle. And since we're at the beginning of the mass foreclosures I don't see this turning around any time soon, not even 2009 as projected. Remember, they're freezing ARM rates for 5 years. They will control the foreclosures to a more stable rate but I feel this will prolong the suppressed market rather than get it going again. It's just going to stop a total collapse of the lending industry.
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