Stable Market

[Derek Schmaltz]

If the average home appreciation in a market has been is 3%-5% annually for an extended period of time and current market trend analysis shows a 3.8% increase year over year would you mark as stable or increasing? or different scenario - let's say the average appreciation for market was 6%-7% for extended period of time and current analysis shows 3.8% would you mark declining due to it being under the long term average? I am probably over thinking but peer opinions are welcomed.

 

[J Grant]

If the average home appreciation in a market has been is 3%-5% annually for an extended period of time and current market trend analysis shows a 3.8% increase year over year would you mark as stable or increasing? or different scenario - let's say the average appreciation for market was 6%-7% for extended period of time and current analysis shows 3.8% would you mark declining due to it being under the long term average? I am probably over thinking but peer opinions are welcomed.

If the market segment you are analyzing is still increasing, as per listings, DOM and last quarter prices, even at a slower pace then IMO mark increasing. If too minor an increase or showing variations up and down over the year then stable.

 

[DWiley]

If the average home appreciation in a market has been is 3%-5% annually for an extended period of time and current market trend analysis shows a 3.8% increase year over year would you mark as stable or increasing?

What you describe is steady growth, not a stable market.

 

[Terrel L. Shields]

not a stable market.

That implies no growth even if the population is growing and that sounds like a market in retreat???

I would think that the trend line is X/Y and "increasing" is a trend above that trend line and "decreasing" is a trend below the long-term trend. That doesn't tell you anything about length of the trend line, and Semantics perhaps but what year have we ever had zero inflation in the US? Naturally, there is a trend line that follows the economy and that is going to be independent of any indication regarding the housing market being 'hot' or 'cold'.

 

[Charles West]

If the average home appreciation in a market has been is 3%-5% annually for an extended period of time and current market trend analysis shows a 3.8% increase year over year would you mark as stable or increasing? or different scenario - let's say the average appreciation for market was 6%-7% for extended period of time and current analysis shows 3.8% would you mark declining due to it being under the long term average? I am probably over thinking but peer opinions are welcomed.

Compare that rate with the inflation rate; if the housing appreciation rate exceeds the inflation rate, it would indicate a growing market with price appreciation, in my opinion.

 

[Joe Flacco]

What you describe is steady growth, not a stable market.

What is the line between stable and increasing in your opinion?

Is it 1%, 2%, 3%? What is it?

 

[shrubberyvaluation]

If the average home appreciation in a market has been is 3%-5% annually for an extended period of time and current market trend analysis shows a 3.8% increase year over year would you mark as stable or increasing? or different scenario - let's say the average appreciation for market was 6%-7% for extended period of time and current analysis shows 3.8% would you mark declining due to it being under the long term average? I am probably over thinking but peer opinions are welcomed.

Just had one with 4 percent annual increase, marked increasing and adjusted as needed.

 

[shrubberyvaluation]

Compare that rate with the inflation rate; if the housing appreciation rate exceeds the inflation rate, it would indicate a growing market with price appreciation, in my opinion.

Price appreciation due to inflation is still increasing prices.

 

[Charles West]

Price appreciation due to inflation is still increasing prices.

If the price appreciation equals the inflation rate, I would select the stable box.

 

[ZZGAMAZZ]

Compare that rate with the inflation rate; if the housing appreciation rate exceeds the inflation rate, it would indicate a growing market with price appreciation, in my opinion.

I was recently wondering how long it would it be before the next epiphay hit home!!! Now wondering whether that perspective is supported by peers, and if so, whether the rationale is described in the analysis of the various markets being reported upon in each appraisal.

IMPO, to compare the two rates seems almost too straightforward. However, to what extent is the rate of inflation affected by changes in the housing market? Would the impact on the inflation rate affected by changes in housing need to be removed from the inflation rate before the two rates are compared, to avoid the confounding "double-dipping" effect of housing on inflation?