AUTHOR: Steven R. Smith, MSREA, MAI, SRA, Smith Realty Advisors, 936 San Jacinto St., Redlands, CA 92373, Real Estate Appraisals, Consulting, Expert Testimony, Forensic Reviews, Fraud Research and Analysis, Litigation Support, Fraud Training. Phone: 909-798-8855
Today, after 6:00 P.M. I logged onto one of the local MLS systems, this one the Desert Area MLS (California). It is part of the Rappitoni system. When you log in, before you do a search, you get a view of Daily Activity. Daily Activity is a good thing.
It is good to know what is happening daily. In this market, Price Reductions lead the market activity, followed by New Listings, then Expired Listings, then Sold, Inactive, Contingent, Back on Market and Price Increases.
All are Market Data. The key is in knowing how to use them, how to process or adjust them into a meaningful indicator of value.
In soft or declining markets, sales are a small part of the activity. That being the case, a sale may be the least meaningful indicator of value. Price Reduced properties might be a good source to contact their agents and find out where they see the market, if they have had any Offers, where they see it selling, how they compare to your subject, etc, etc. They are very talkative.
The agents with the worst memories are ones who spent their commission months ago. Those who are Pending, have a keen sense of detail. Those with over priced Listings are good candidates to talk to.
Housing Markets are generally dynamic, not stable. Talking to participants or their authorized agents is the way appraisers can learn what is happening in the Market. Staring at comparable books or computer runs of what has Closed months ago, is just the recent History of the Housing Market.
What is going on today will not be revealed by something that closed 2 months ago. One needs to be talking with those who are in the market today. Six interviews per day is enough to know what is actually happening, as opposed to reporting on recent history.
We all build our reputations, every day with every job. How do we want to be known, as an aware, skilled, astute appraiser? The choice is ours individually.
Those who do 4-5 appraisals per day cannot be aware of what is happening. They must keep blinders on and not talk to a living soul actually involved in the Housing Market. They cannot make Market Derived adjustments or have a basis in fact for their Market Analysis. All of that takes time and primary research and real analysis.
AUTHOR: Steven R. Smith, MSREA, MAI, SRA, Smith Realty Advisors, 936 San Jacinto St., Redlands, CA 92373, Real Estate Appraisals, Consulting, Expert Testimony, Forensic Reviews, Fraud Research and Analysis, Litigation Support, Fraud Training. Phone: 909-798-8855
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