Time Adjustment , huh?

[Doug Wegener]

I have seen this more than once. I am looking at a report which says "Sales older than 90 days were adjusted 1% per month to account for changes in market conditions".

Huh? Where on earth did the idea come from that you don't adjust for sales less than 90 days. It makes no sense in an increasing market. Does anybody know? As I mention, I have seen this on more than one occasion.

 

[Dublin ohio]

Where on earth did the idea come from that you don't adjust for sales less than 90 days.

Because they really don't know what they are talking about. I could see that if I had firm data that showed a flat market for the previous 90 days and current listings say the same. But other than that. Can you say skippy

 

[Terrel L. Shields]

Huh? Where on earth did the idea come from that you don't adjust for sales less than 90 days.

If you don't adjust for SF when less than 50 SF or 100 SF difference, then adjusting for short term "time" is a guess. The variation of prices in the inefficient market we call housing means we cannot really call such variations on a daily, weekly or even monthly basis without an element of uncertainty - aka - the margin of error is high. That's why the oft quoted praxis was that the appraiser was 'good' if they got within 5% of the "true" value. So you are not going to be particularly accurate attempting to make time adjustments monthly. Even Case-Shiller and the NAR project their numbers by adjusting for the season... are you?

 

[Tiffany Gibbons]

I have seen this more than once. I am looking at a report which says "Sales older than 90 days were adjusted 1% per month to account for changes in market conditions".

Huh? Where on earth did the idea come from that you don't adjust for sales less than 90 days. It makes no sense in an increasing market. Does anybody know? As I mention, I have seen this on more than one occasion.

Where I am, especially in more outlying areas, that's when the upward peak was, it has stabilized since then, interest rates rising slowed the increase.

 

[Fernando]

I have more certainty making time adjustments over five months.
Any more recent has too much uncertainty with outliers and insufficient sales to make the call.
Unreasonable to do time adjustments within 3 months.

 

[CGinMN]

Where on earth did the idea come from that you don't adjust for sales less than 90 days.

My guess is that the origin is the 1004MC, which breaks the most recent period into 0-90 days. From there appraisers, including many here, twisted it into an unwritten rule of residential mortgage financing appraising.

 

[Fernando]

It's best not to do time adjustments and stick with 3 months comps.
I had one good comp sold last year and I had to use it and make time adjustment. I hate doing time adjustments because of high degree inaccuracy.

 

[Dublin ohio]

I hate doing time adjustments because of high degree inaccuracy.

In an active urban or suburban market. It is probably the easiest and most accurate adjustment you can make.

 

[gregb]

In an active urban or suburban market. It is probably the easiest and most accurate adjustment you can make.

May be lazy too, no market condition adjustment for a 3 month old sale given its earlier under contract date could be considered actionable by a property owner, unless explained by the appraiser.

 

[Fernando]

In an active urban or suburban market. It is probably the easiest and most accurate adjustment you can make.

You sound like a real estate agent. Everything's going up. Gotta make market increase adjustments.