Stable Market

[J Grant]

Yet the 1004MC emphasizes on past trends, thus appraisers rely on those figures.
Never understood just like comparing to stock market.
Who cares the trend past 6 months or year for stocks. More important is what's happening now.

I agree that what is happening now is more important. But RE is less volatile than stocks so a past /recent past history is meaningful.

The 1004 MC form is on a different page and asks a different question.

 

[Fernando]

I agree that what is happening now is more important. But RE is less volatile than stocks so a past /recent past history is meaningful.

The 1004 MC form is on a different page and asks a different question.

Interest rates and economic events could have changed real estate market in past 6 or 12 months.
Appraisers are not known to see these variables affecting real estate.

 

[J Grant]

Interest rates and economic events could have changed real estate market in past 6 or 12 months.
Appraisers are not known to see these variables affecting real estate.

We are supposed to know.

 

[Fernando]

We are supposed to know.

For many it's easy to look at the absolute numbers and don't read behind the figures.
Just like MAGAs, they look at the numbers and don't think independently.

 

[alebrewer]

We are supposed to be able to support our opinions and conclusions with recognized methods and techniques. WRT market trends, I don't know that we ever 'know'. We make supported assertions based on our data analysis.

 

[ZZGAMAZZ]

B4-1.3-08, Comparable Sales (06/04/2025)

This topic contains information on selection of comparable sales, including:

selling-guide.fanniemae.com

When choosing comparable sales, the appraiser should examine the market area of the subject property, assess its characteristics, and identify similar comparable sales. Market area is defined as the geographic region, for a subject property, from which most demand comes and in which most of the competition is located. This does not mean comparable sales must be identical to the subject property, but instead should be competitive and appeal to the same market participants that would also consider purchasing the subject property. If the available comparable sales are not similar, the appraiser needs to decide whether an expansion of the market area search is appropriate. If this occurs, the appraiser must provide commentary to explain the rationale for selecting comparable sales outside the subject's market area and make location adjustments if warranted.

Comparable sales from within the same market area (including subdivision or project) as the subject property should be used when possible and must be used in certain instances (see below). Sale activity from within the neighborhood is the best indicator of value as sales prices of comparable properties from the same location should reflect the same positive and negative location characteristics.

Fannie Mae does allow for the use of comparable sales located in competing market areas, as these may simply be the best comparables available and the most appropriate for the appraiser’s analysis. If this situation arises, the appraiser must not expand the neighborhood boundaries just to encompass the comparables selected. The appraiser must indicate the comparables are from a competing neighborhood and address any differences that exist. The appraiser must also provide an explanation as to why they used the specific comparable sales in the appraisal report and include a discussion of how a competing neighborhood is comparable to the subject's neighborhood.

If a property is located in an area in which there is a shortage of truly comparable sales, either because of the nature of the property improvements or the relatively low number of sales transactions in the neighborhood, the appraiser might need to use properties that are not truly comparable to the subject property. In some situations, properties that are not truly comparable may simply be the best available and the most appropriate for the appraiser’s analysis. The use of such sales is acceptable if the appraiser adequately documents the analysis and explains why they were used. (For additional information, see B4-1.3-03, Neighborhood Section of the Appraisal Report

the appraiser must not expand the neighborhood boundaries just to encompass the comparables selected.......

Is it humanly possible for anybody to determine objectively that an appraiser did so, especially because it is the responsibility [and corresponding Authority] of the appraiser to define the Neighborhood, based upon its definition os a "congruous group of of complimentary land uses," which means less than anything tangible. My perspective is just for the sake of argument to express my opinion that most of the standards that an appraiser is required to honor are meaningless...

 

[ZZGAMAZZ]

Yet the 1004MC emphasizes on past trends, thus appraisers rely on those figures.
Never understood just like comparing to stock market.
Who cares the trend past 6 months or year for stocks. More important is what's happening now.

gonna report on a trend that pertains to a specific date in time? Might not meet the criteria to be defined as a trend. Sure it leads up to the Effective Date of an assigment.