Time Adjustment , huh?

[Tiffany Gibbons]

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.

It might be difficult for an unintended user to contest an appraiser's reasoning for making or not making a market adjustment. The appraiser is a licensed unbiased professional. The property owner is hardly unbiased. What about a sale a month old?

 

[Fernando]

It might be difficult for an unintended user to contest an appraiser's reasoning for making or not making a market adjustment. The appraiser is a licensed unbiased professional. The property owner is hardly unbiased. What about a sale a month old?

6 months ago the market was different, during slow winter season and mortage rates were lower so time adjustments can be higher.
Past few months, rates went up and start of home buying season so no need to make time adjustments.

 

[gregb]

It might be difficult for an unintended user to contest an appraiser's reasoning for making or not making a market adjustment. The appraiser is a licensed unbiased professional. The property owner is hardly unbiased. What about a sale a month old?

Good questions. What do you conclude as to a one month old sale, if the pendings and/or actives suggest the market is moving, either up or down>

 

[Fernando]

Few weeks ago I gave less credence to listings.
Now I give more weight being good indicator of what market is doing.
Before listings get sold within a week.
When listings now get lowered list price and marketing time more than two weeks, market is changing and using time adjustment now especially for recent 3 months comps is not appropriate.

 

[CGinMN]

Here’s a variation of a comment I see in a lot of reports:

An analysis of sales data for the subject’s market segment indicates market conditions have been increasing over the 12 months prior to the effective date. Comparables that sold more than 3 month prior to the effective date are adjusted at +1% per month. There is not enough data to support a market trend for comparable properties that sold over the past 3 months, therefore an adjustment of +0% per month is made.

Some here will say that’s perfectly acceptable. If so, what about this?

An analysis of sales data for the subject’s market segment indicates market conditions have been stable over the 12 months prior to the effective date. Comparables that sold more than 3 month prior to the effective date are adjusted at +0% per month. There is not enough data to support a market trend for comparable properties that sold over the past 3 months, therefore an adjustment of +1% per month is made.

Or, how about this?

An analysis of sales data for the subject’s market segment indicates market conditions have been decreasing over the 12 months prior to the effective date. Comparables that sold more than 3 month prior to the effective date are adjusted at -1% per month. There is not enough data to support a market trend for comparable properties that sold over the past 3 months, therefore an adjustment of +0% per month is made.

Same logic, equally flawed.

 

[Fernando]

If I had my way, I wouldn't do any adjustments and in final reconciliation indicate which comps I gave more weight in my analysis.
Reviewers are the ones requiring me to make time adjustments because I said there's an increasing trend.
Thus I do a linear time adjustments which the reviewer understands.

 

[Fernando]

U.S. Census Bureau shows the population of San Francisco decline significantly between July 2020 and July 2021.The city with 2nd most decline was NYC.
This may explain why the price increase in SF has not increased as much compared to other parts in the nation.
No need to worry because it happened decades ago.
When the city becomes safer and more receptive to business and office workers return, population will increase again as well as more home price increases.

 

[Tiffany Gibbons]

I see active listings priced way out of range often as I work in outlying areas with unusual homes and acreage (not subdivisions) and I'm not privy to the contract price or terms on pending listings. Probably different from what you are reviewing.

 

[Fernando]

I see active listings priced way out of range often as I work in outlying areas with unusual homes and acreage (not subdivisions) and I'm not privy to the contract price or terms on pending listings. Probably different from what you are reviewing.

Homes here are listed usually 10% below list price sometimes more to get more offers.
Agents would boast in their marketing flyer that its their brilliance and skill in getting high offer (market value) on their list price.
It's so common and acceptable practice to list below market and let buyers bid up the price.
It's easy to be a salesman....I mean listing agent.

 

[Tiffany Gibbons]

Homes here are listed usually 10% below list price sometimes more to get more offers.
Agents would boast in their marketing flyer that its their brilliance and skill in getting high offer (market value) on their list price.
It's so common and acceptable practice to list below market and let buyers bid up the price.
It's easy to be a salesman....I mean listing agent.

Yes, here in my city, that's what is happening, where there is an undersupply of housing, there are multiple bids all the time. The bad thing is out of town REITs come through and bid waaay over market and they are all cash. They rent the homes at twice the marker rent to multiple people.