This is a pretty niffty detailed chart for finding time adjustments, we are done.

[Fernando]

When I look at some home values here at Zillow, over the past two years prices for that subject went up a bit and down a bit but overall we see a stable trend overall (no price increase).
Only when you step back at least a year can you see if there really was a change in market condition unless there was significant price change.

 

[TerryRohrer]

The problem remains that many appraisers think pronouncements by FNMA establish appraisal methods and practices. In fact, they only relate to what they (GSEs) want to accept into their system. Whether or not that acceptance occurs or not is another topic. In a very quick search of the Appraisal Institute's Lum Library, I discovered an article from the July 1958 issue of the Appraisal Journal entitled "How to Use Market Data in Making an Appraisal" by Harry Fenton. In part, that article touched on Physical Adjustments, Time Adjustments, and Highest and Best Use. It is pretty clear that it was not a new concept at that point. So, no currently practicing appraiser has worked at a time when "time adjustments" or "market conditions" adjustments were not required when necessary for competent analysis. Certainly, since USPAP has been enforce, there has been a "requirement" to apply time adjustments when warranted. That some will now consider actually attempting to determine and apply such is more an indictment of appraiser practitioners than anything else.

 

[Fernando]

USPAP said we can have the backed up data in our work file. However, we see Fannie doesn't believe in appraiser's knowledge and wants to see it.
Shouldn't surprise us that Fannie doesn't trust appraisers. It's been that way especially since Great Recession.

 

[shrubberyvaluation]

And what happens when their broad brush market analysis shows prices are decreasing in the greater Baltimore area but the subject's market segment is stable or increasing (or vice versa). Are we gonna get hit if we do it correctly? And if we do it correctly will we be hit with discrimination if FNMA broad brush statistics show different than the subject's market?

 

[alebrewer]

I've seen some crazy AVM outputs, one of which treated three-year-old refinances as sales, then applied time adjustments to them and using that mortgage amount data to estimate a current value for a subject property. And the lender was actually using them for home equity loan decisions. When you think that there is no way AVMs could operate in your market, better think again.

I think a big part of that is due to the fact that you're in a non-disclosure state. The only thing that gets recorded is the lien, so they have to build rules around how that lien relates to (the unknown) sales price.

 

[Mike Ault]

I think a big part of that is due to the fact that you're in a non-disclosure state. The only thing that gets recorded is the lien, so they have to build rules around how that lien relates to (the unknown) sales price.

I wonder what the GSE's would do to us if we use that methodology in our appraisal reports. I know what the state would do, and undoubtedly, so do you.

 

[alebrewer]

I wonder what the GSE's would do to us if we use that methodology in our appraisal reports. I know what the state would do, and undoubtedly, so do you.

No doubt! The GSE's don't have to, though - they're mining all the comp data out of the thousands of reports that get delivered to them daily. The Zillows and Redfins don't have access to that or the MLS, though...

 

[DTB]

Countrywide opened their doors in 1969. I was doing work for them in the late '80's. Was doing work for CLT appraisal Service in the early '90's. To your point, though, would it matter? Unless that mortgage lender had the sales books, FEMA mapping services, made a personal visit to the subject property and comps, drove down to the courthouse to review deed transfers, etc. How would they know?

The enhancements were instituted as they became available. And of course they were integrated to increase efficiency and speed - isn't that mostly why any new technology is embraced? Not sure what point you're trying to make here?


30 miles in my market area is nothing...


How is this example related to any specific point in time? I could provide similar examples from 30 years ago...

I am willingly going way out on a limb here to say that the model of using out of area appraisers working under unrealistic turn times does not result in better, more accurate or credible appraisals, regardless of the enhancements.

Maybe it's just me.

 

[alebrewer]

I am willingly going way out on a limb here to say that the model of using out of area appraisers working under unrealistic turn times does not result in better, more accurate or credible appraisals, regardless of the enhancements.

Maybe it's just me.

I've long contended that, for 90% of residential appraisal work, if you have the data, you can produce credible results. That said, I guess you'd have to define 'out of area'. Back in the days I lived 50 miles outside Dallas, yet drove to the metroplex every day. Knew that market better than most that lived there.

I don't disagree with you WRT unrealistic turn times. It just takes time to develop credible results. Which is why appraising is never going to make anyone rich. We're restricted by what we can physically do.

 

[Terrel L. Shields]

30 miles in my market area is nothing...

And it can even be as far as 10 miles between Dollar General stores.

ut that number of sales looks like it could be the entire Dallas/Fort Worth metroplex. Be nice if they lived in the real world.

And that begs the question. What kind of trendline do we run? Linear? Logarithmic? running average? Or, maybe a 2nd order derivative is just the ticket?