Time Adjustment , huh?

[Joe Flacco]

Look at this segment of a neighborhood. 80's and 90's homes on lot sizes less than 15,000 SF. Again shows seasonality at work and demonstrates how most of the price gains occur in the spring. More balance in the summer, fall, and winter, then all of a sudden sold for average of 17% over ask in the spring. 17% is obviously not a normal spring but it shows the significance of the spring market relative to other seasons.

End of spring and into summer, the sellers now know what the spring sale prices are, so the list prices are much higher now than it was in the spring.

 

[Terrel L. Shields]

Our local market in Fayetteville (hottest town around here) has seen higher prices and fewer sales...DOM shorter - Not normal, sales shouldn't peak in April here. Listing prices are much higher but DOM is increasing in some towns.

My local town - longer to close. We have had a lot fewer deeds and mortgages filed year over year.

 

[RCA]

Local markets can differ. How do you know that before 90 days there was any upward or downard trend in sales prices? I see this all the time in regression. - Especially since I often go back 15 years or so. I let R:earth decide when to change the time gradient.

 

[sputnam]

I make constant rate so reviewers can understand. Anything more complex and they won't understand.

Fernando... Can you show me in USPAP, any appraisal textbook, or any GSE guideline where the appraiser's job is to change the way adjustments are made to make it easy for reviewers?

 

[Vermonter]

Fernando... Can you show me in USPAP, any appraisal textbook, or any GSE guideline where the appraiser's job is to change the way adjustments are made to make it easy for reviewers?

We should all be shocked he's bragging about it, but ya know

 

[ZZGAMAZZ]

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.

To clarify the OP, we are speaking of the contract date, eh?

 

[Fernando]

Fernando... Can you show me in USPAP, any appraisal textbook, or any GSE guideline where the appraiser's job is to change the way adjustments are made to make it easy for reviewers?

It's common sense which many appraisers lacked when following everything strictly by USPAP.
Before USPAP, appraisers had to convey to their best of their ability to make report understandable so not to be misinterpreted or misleading.
Newbies and some oldbies think if not in USPAP, they have no obligations to do anything more.

 

[sputnam]

It's common sense which many appraisers lacked when following everything strictly by USPAP.
Before USPAP, appraisers had to convey to their best of their ability to make report understandable so not to be misinterpreted or misleading.
Newbies and some oldbies think if not in USPAP, they have no obligations to do anything more.

I don't know if you are being purposely obtuse.. or if you really believe the nonsense you post. No one said that USPAP was all that is needed. What I said was... You do not change appraisal methods to make your Client or an Agent happy with your work. You do not 'create' new and unsupportable Fernando methods of determining adjustments. And whether you like it or not.. you ARE required to comply with USPAP and with every Client guideline (unless it violates USPAP). It's not just a good idea... in most states, it's the law.

 

[Salty]

I very rarely make condition adjustments when the contract date is within 3 months of my effective date. Not enough sales in such a short period of time to derive a credible trend. My analysis is done quarterly. Never ever had an issue. not saying I wouldn't, but my current procedure is not to as not necessary and not enough data.

 

[Joe Flacco]

In a more normal increasing price market when prices are going up like 6% per year, if your method is annualized on a per month basis then .5% to 1.5% adjustment for the last three months is really insignificant. Why bother.

But doing it that way in the market of the last couple years, you would be like 10-20% low on nearly every appraisal in the spring season.