Stable

[alebrewer]

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?

Based on economic theory, an undersupply of product will induce demanders of said product to bid up the price of the product until it reaches a new market clearing equilibrium (assuming a static demand) - and vice versa. One of the main rubs, though, is that the RE market is an inefficient market, meaning that demand and supply do not always behave in a predictable fashion. This is due to several factors, including asymmetry of information, dissimilarity of product, barriers to entry, supply of product at any given time, etc.

 

[glenn walker]

I have never seen a truly stable market in Southern California since I got in 1978. It's always bouncing up and down and stable for 6 months before a trend changes. My father said the only stable market was in the fifties and early sixties were the rule if thumb was you needed about 6 to 7 years to cover sales costs. But I know of some areas were raw land was flat for 10 to 15 years. I think the stable box needs a definition like maybe prices didn't move up or down in a 12 month period. Remember Pre Computers realtors and appraisers did not have easy access to charts and graphs and data except on the yearly release by say NAR and so most didn't know if it was just a dead market or stable.

 

[alebrewer]

I think the stable box needs a definition like maybe prices didn't move up or down in a 12 month period.

I think that's part of the rub. They want P1 to reflect the 12 month frame, but want adjustments on the grid to (potentially) reflect monthly deltas.

 

[Fernando]

Recently I used a 3 year old comp and I did large time adjustment.
Reviewer didn't like it. WTF.
Hate it when I'm restricted in how I appraise.