Stable

[TerryRohrer]

The question is "Does stable indicate a fixed change from a baseline that is level? Or is it a second derivative of a trendline that, long term, has gone up since this nation was created?" The current trend further needs thought in terms of total price, or price per SF. Would that not impact the assessment?

I mean if only the total is considered then nothing is "steady" and the long-term trend line is always up. Do we use the deviation from the past month(s) or a deviation from the long-term inflating prices determined by general increases in prices due to inflation from all sources?

I agree there needs to be a definition of STABLE. I agree there needs to be clarity on whether that means a change in the trend or whether it means no change is stable and up or down are measured against that trend or otherwise. But that discussion can't end when all the extraneous crap in the world that might change on buyer's mind in Timbuktu are drug into the discussion. A competent definition of stable will include exactly how it is to be measured. The first step has actually been taken...on the 1004 form on the front page, "When completing the One-Unit Housing Trends portion of the Neighborhood section of the appraisal report, the trends must be reflective of those properties deemed to be competitive to the property being appraised. If the neighborhood contains properties that are truly competitive (that is, market participants make no distinction between the properties), then all the properties within the neighborhood would be reflected in the One-Unit Housing Trends section." Yet, appraisers can't be content to simply address what they have been asked to address.

 

[TerryRohrer]

Right now in markets I work, overall, sales are down, prices are not down, DOM are up, and the list to sales price ratio is increasingly lower selling prices and more reduced price listings. So, is the market 'up' ? or is it 'down'? What metric is the "right" metric?

If prices are not down and prices are not up, how can the trend in prices be anything but stable? And right next to that, if DOM are mostly in a range, why can't that be reported as within a specific range, with a note that they are increasing? The question is not "is the market up or down." the question is "What is the trend in one-unit housing prices in the subject neighborhood?"

 

[Terrel L. Shields]

If prices are not down and prices are not up, how can the trend in prices be anything but stable?

buying power. If I sold my house in 2005 for $80,000 and then it sold again in 2025 for $80,000, is the market stable? Of course not. It should have inflated by double or more, despite probably being worth less than $80k in 2008.

 

[Fernando]

If you look at some foreign currencies, it goes up and down in one year.
Currently it could be going down. Would you then say trend is going down based on recent data or stable if it's within the median in past year?

 

[Sadie]

What is a stable price trend? What is the criteria for it and how is it identified?

well, here I see less than a percentage point change in avg prices year over year. That says stable in my world.

 

[Fernando]

buying power. If I sold my house in 2005 for $80,000 and then it sold again in 2025 for $80,000, is the market stable? Of course not. It should have inflated by double or more, despite probably being worth less than $80k in 2008.

Same as when I bought property in 2021 for a million dollars. If it's still a million dollars today, would you say market is stable? I wouldn't.
I would cry (not really) that I could have made more in the stock market.

 

[TerryRohrer]

buying power. If I sold my house in 2005 for $80,000 and then it sold again in 2025 for $80,000, is the market stable? Of course not. It should have inflated by double or more, despite probably being worth less than $80k in 2008.

Exactly...computers don't have this inability to look at a clear question and not drag every pile of crap under the sun into consideration. If you are asked if the sun is down, I expect you run out and count the stars and how many neighbors have their yard lights on, and measure the lumens of light reaching you from each, and then explain how there are varying degrees of light outside, in lumens, to explain why it is not truly dark, too.

 

[alebrewer]

Right now in markets I work, overall, sales are down, prices are not down, DOM are up, and the list to sales price ratio is increasingly lower selling prices and more reduced price listings.

Analysis of this data should be part of the overall undertaking as well. Which, I think, was the gist of forcing appraisers to utilize the 1004MC. It seems to me that they're now stuck on just regressing price to date. Regressing price and date, it seems to me, is pretty good for identifying cyclical markets, but wouldn't be sufficient to confirm 'declining' or 'increasing' without analysis of those other factors as well. IOW - if I have a data set that shows a nominal decline (let's say ~ 4% over 12 months, or ~ 0.33%/month, but median DOM is 15 days, LtoS ratio is 101%, concessions found on < 10% of transactions, and a short supply (let's say < 1 month), how can I call that a declining market? There would almost HAVE to be some anomaly within the sales prices to account for that.

To be sure, the analysis points to a deeper dive, but the simple price to date regression is not sufficient.

 

[Fernando]

When we were just getting out of the Great Recession, I felt prices were about to go up after many years of no increase and so I bought. I was right and got best deals in my lifetime.
Past few years, I had no appetite to buy real estate because of the interest rate environment and don't sense of increase in real estate prices regardless of past 12 month trend and what other appraisers indicate.

 

[Joe Flacco]

I don't think you can just look at prices. What about DOM, buyers asking for and getting concessions, how many listings have had at least one price reduction, how many sold over list? For me, where the rubber meets the road, its what's going on with the listings, because that will tell you more about the market today than some sale that's x months old.

It sounds like what you are saying is that the market conditions influence your opinion of if values are stable, increasing, or declining.

Or maybe that information has more to do with if the market is balanced, oversupplied or undersupplied.

Looking at all of the information together, would you say that to have an overall increasing value trend the market must be undersupplied, and to have an overall declining value trend the market must be oversupplied?