I am using the research that I obtain in the 1004MC research.  I rely on that information and make the appropriate adjustments.

 

I don't make adjustments for less than six months; I honestly believe the market has already taken care of that.  Of course, there are extreme cases where the market is so dynamic, you have to make adjustments for a shorter period.

 

I convert the annual rate to a monthly rate and apply it to all comparable sales.  I try to find the market condition and not only the S/D.  Usually, I do a one or two mile radial search for my data.  I don't over think it.

 

MEP

 

I personally feel that the time adjustments should reconcile the comparable sales utilized to the adjusted price of current listings in the area.  When we apply a time adjustment based on bulk data i.e. the % change in median sales price over a length of time, it isn't reflective of every single transaction in the area.  Bulk data shows the over all decline.  Within that number,  different sales have declined at different rates, some have not declined at all, and some have increased.  As we know, in a perfect market w/ perfect market data and perfectly informed consumers, our analysis would lead to NO range.  The adjustments would reconcile to a perfect number.  In reality, the reason that we have a range is because A)our data isn't perfect and B) consumers get "good deals" and "bad deals".  So, when you do a negative time adjustment for a consumer who got a "good deal", it is not likely a reflection on that comparable sale.  Example:

Let's assume we have perfect matched pairs (the subject and comparable sales are all identical) effective date of appraisal is 1/20/09:

 

Sale A sold on 9/20/08 for $200,000 "bad deal"

Sale B sold on 9/20/08 for $190,000 "good deal"

(I see more and more of this w/ all the different motivations out there)

 

Median prices in the over all market have declined at 1% per month over the last 12 months.  Current inventory in the subject market adjusts to 190k. (including list/sales price adjustment).  a negative time adjustment of $10,000 would be applied to sale A and no time adjustment would be applied to sale B.  Sale A has gone down in value by 5% in 4 months when the over all market has gone down by only 4%.  Sale B has not lost any value.  If you did a 4% adjustment based on bulk data, you are saying that sale A has gone down in value by less than it actually has, and sale B has gone down in value even though it likely has not.  In my opinion, time adjustments based on bulk data are rarely reflective of the comparable sales actual decline.

 

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Stewart, you prove my point.  You are in a specific market, you cannot treat all markets the same.  Most that I have checked have a list price to sales price of 90 to 95% and price declines for less than 15%.  In face, most are between 5 and 10%.  I try to look at trends, sales to list price ratio and overall activity.  Remember, a few sales do not create the market unless they are the only sales.

 

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Stewart, you prove my point.  You are in a specific market, you cannot treat all markets the same.  Most that I have checked have a list price to sales price of 90 to 95% and price declines for less than 15%.  In face, most are between 5 and 10%.  I try to look at trends, sales to list price ratio and overall activity.  Remember, a few sales do not create the market unless they are the only sales.

 

 

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