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Why can't we band together on Feb 4th?

Tim Hicks (Texas) said:
In Texas, you can have 1-4 fireplaces in a higher quality house. It is ridiculous that some think they have no contributory value. What about a patio fireplace which is quite a trend right now? What does your fancy smancy Spark graphs have to say about fireplaces?

My point is that one should not dismiss fireplaces as having no value because some appraiser in never-never land says so.
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I think you may have misread my post, Tim. What I said was that your analysis should determine whether the market recognizes a premium or not. To use a GHism - the opinion should come after the analysis, not in lieu of it. You can't make a statement that fireplaces ALWAYS have contributory value - nor can you make a statement that they never have contributory value. Your analysis - for each assignment - should determine that. It may be that, at the $200k price point, houses without fireplaces sell for the same as houses with fireplaces, but at the $1M price point, they're worth $20k a piece. Let the data speak without any predetermined outcomes on the appraiser's part.
 
With an uncertain and often minor value contributor like a fireplace, one can reconcile at the higher end of value for it by x$ rather than make a line adjustment for it. In different price ranges and quality or local weather, a feature like a fireplace or reverse water osmosis system etc, might or might not have value, but it is often difficult to extract.

The reason is often that every house has an upgrade of some kind, such as a fence, a built-in barbeque, or extra landscaping. We can't make a credible line item adjustment for each of those items unless it adds enough significant value to matter. I often include such items in the overall upgrade contribution.
 
Here is what I have come up with for my Chart that I will include in my reports. I know it's probably not the greatest, but I gotta start somewhere.

Market Trends Overview (Increasing)
The market area has experienced an overall upward trend over the past 12 (24) months.
Based on an analysis of market data from MLS, median sale prices in the subject’s market area have increased at an average annual rate of approximately XX per day.
The method to determine was regression analysis (See Chart). The coefficient of time in a price regression model indicated an average daily increase of $XX which is applied to the comparables (if applicable)

Pretty much the same thing (opposite obviously) will be used for declining markets.

Comments, suggestions accepted.
 
OG80 said:
Here is what I have come up with for my Chart that I will include in my reports. I know it's probably not the greatest, but I gotta start somewhere.

Market Trends Overview (Increasing)
The market area has experienced an overall upward trend over the past 12 (24) months.
Based on an analysis of market data from MLS, median sale prices in the subject’s market area have increased at an average annual rate of approximately XX per day.
The method to determine was regression analysis (See Chart). The coefficient of time in a price regression model indicated an average daily increase of $XX which is applied to the comparables (if applicable)

Pretty much the same thing (opposite obviously) will be used for declining markets.

Comments, suggestions accepted.
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Good comments, but I would NEVER get as specific and granular as increasing $ per day! this is not the stock market; this is RE, and we are looking for market value the only reason we make market/condition time adjustments is to bring older contract-dated sales into line with the most recent trends as of the effective date. For trends in RE to be meaningful, they usually have to show some kind of traction, 2-3 months at least -and have a reason - WHY did the market change and decline or rise or go stable ? Mortgage rates changed? Supply /demand changed?

They don't want appraisers acting like robots and simply saying the median did oX or the average price did X. I can not comment on whether coefficients from regression analysis need an explanation, but I do not work with it, so take that for wiw.

I would always correlate whatever is seen in a chart or graph with the market activity we analyze with our comps and listings and pending.
 
To convert it into a percentage, multiply say -$35.00(per day) by 365 days in a year and then divide by the average sale price of the data set, such as $256,000. For instance, 35 * 365 equals 12,775. Then, dividing $12,775 by the average sale price of $256,000 results in approximately a 5% change or appreciation in prices in a year.
 
OG80 said:
Here is what I have come up with for my Chart that I will include in my reports. I know it's probably not the greatest, but I gotta start somewhere.

Market Trends Overview (Increasing)
The market area has experienced an overall upward trend over the past 12 (24) months.
Based on an analysis of market data from MLS, median sale prices in the subject’s market area have increased at an average annual rate of approximately XX per day.
The method to determine was regression analysis (See Chart). The coefficient of time in a price regression model indicated an average daily increase of $XX which is applied to the comparables (if applicable)

Pretty much the same thing (opposite obviously) will be used for declining markets.

Comments, suggestions accepted.
Click to expand...
"the relevant market the trend of homes similar to the subject shows an increase of 5% over the past 121 months (for example ). The trend line is used to make market condition adjustments to bring the older contracted dated comps into equivalence with market conditions as of the effective date. Regression analysis was used for the chart. The appraiser reviewed individual sales and listings and pending sales which indicate the same range of increase, due to interest rates remaining moderate and steady demand shown in the market area for newer single family homes "( or whatever the subject is )
 
I wonder what’s gonna happen to the GSE cyborg computers when they get thousands of appraisal reports in the same market area with different numbers.

It’s amazing what this profession has become. We’re trying to achieve a level of precision that is not possible.

Here’s a question, what’s a stable market? I would say plus or -3 to 5%.

The GSE want to keep this bubble going for as long as they can.

Now that this is only a part-time gig for me, I pretty much stopped all AMC work. A couple direct lenders, private listing appraisals, and a hard money lender. I forgot how much fun this profession is when you are allowed to actually do your job. It’s refreshing to be able to give a real reliable opinion of value.

I do maybe 1-2 AMC jobs a month with 100% revision request rate. Zero revisions for everyone else.
 
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