May 8, 2006 at 10:57 PM #6577
Not alot of threads starting lately, so here goes…
So, I’m in the shower this morning, where I do my best thinking. I think “Boy, the median price is really holding steady when I know prices in my zip code have dropped. I wish we could create an indx of same-home sales in the last year to demonstrate how the median price is tricking us.”
Then, I realized if you are an appraiser, you don’t really have to wait for same-home sales, just appriase the same house every x months. Or the same 10 houses every month. Or the same 1000.
So an out-of-work home appraisers (or a group of them) could make some money in the upcoming slow years by creating an index which gives better market information than currently exists and selling the information.
Start with a sample of homes. Every 3 months or 6 months, or however often you can, run a formal appraisal on each house. Track the results, sell the data. You would have to make some assumptions on interior condition as visiting each house wouldn’t be feasible.
I’ll let an appraiser do the math – how many homes can you do in a week? How much does it cost? This’ll tell you how much you have to sell the data for.
So, if you are an out-of-work appraiser (or not) lemmeno what you think.
Call it the Index of Home Appraiers – or the IHA.
Get Yahoo to sponsor it and call it the YIHA.May 8, 2006 at 11:33 PM #25099sdrealtorParticipant
Clever idea and it would be useful. He’s my issue, appraisers do not attempt to establish market prices but rather they evaluate market prices and render an opinion as to whether they are defensible based upon prior closed sales. It may sound like a small difference but it’s bigger than it sounds. When prices are going up the number they come up with tend to be too low. In a declining market the numbers they come up with will tend to be too high.
With that said, it would be better than what we’ve got.May 9, 2006 at 8:48 AM #25102sdappraiserParticipant
It is an interesting idea, but there are too many confidentiality issues involved. We can’t just release specific data like that for public consumption. I could go into great detail, but its not very interesting reading. Suffice to say, its not feasible in this form.
Just a side point, if your pool of appraisers willing to do this are the ‘out of work’ type, your results will most likely be suspect. Good appraisers are never out of work, there are usually good reasons why others are.
What would probably be more realistic and feasible would be an appraiser economic indictor. A formal survey given to a group of pre-screened appraisers (experience, education, license level, etc) that would somehow measure their perception as to what is happening in their market at or during a specific time. Similar to the consumer confidence index perhaps.
I’m not sure how useful it would be. Most of us would have been wrong for several years if asked to predict the top of this market. We are not fortune tellers and as sdrealtor pointed out, our opinions are only as good as the data we pour through and our ability to properly analyze it.May 9, 2006 at 5:37 PM #25106Steve BeeboParticipant
Around 15 years ago, there was something similar done in San Diego. Appraisers did appraise the same house every year in different areas of the County, and the results were published in the newspaper. I think it was done thru the Chamber of Commerce, but I don’t remember for sure. One appraiser that I knew then participated, but I don’t recall if he was paid for his work or not.May 9, 2006 at 8:31 PM #25110Jim BrubakerParticipant
I think with the current inventory in San Diego at 20,000, you have an appraisal system that gone into confusion. If they were priced to sell (correctly) there wouldn’t be that many houses for sale. Its kind of an understatement, isn’t it?
Its reminds me of the joke about the guy that bought a two million dollar dog. His friend asks him where he got the money and he says, I traded 2 one million dollar cats for the dog.May 9, 2006 at 9:08 PM #25113
I don’t think it would be a tool for future prediction, just a better tool to indicate the current state of pricing. To me, it seems prices have been dropping since August, but the median has been going up since.
Regarding confidentiality – the addresses wouldn’t be published. Only information by zip-code. This would be using publicly available info to run comps on secret addresses with certain Bedroom/Bath/Garage/SQ Ft profiles.
Of course, one would use quality appraisers.May 9, 2006 at 9:33 PM #25114Jim BrubakerParticipant
The median has been going up because nobody is buying the “starter homes.” The rich can always afford to buy. The sale of a couple of one million dollar homes makes it seem as if the median price has gone up.
I you examine what is going on, houses 500k and less are not selling. Above that, they are. What we have is a market top, the data implys that the market is going up, but what it shows, is that the bottom has fallen out of the market.May 9, 2006 at 9:52 PM #25116sdrealtorParticipant
The median is also going up because we have a huge class of homes that is just starting to hit the resale market. There was very little in the way of new construction between the Late 80’s and around 1999. Since then there has been a huge amount of “bigger and better” homes built. To understand what is happening to the median you really need to know about the house that the median represents. In 1999 it was probably a house built in the 70’s while now it is probably something built in the 90’s.May 9, 2006 at 10:33 PM #25117
I understand that and tend to believe it, however I personally haven’t seen any data to support it. It would be nice to have an accepted index of same-home price comparisons to prove it and demonstrate it to the public.May 10, 2006 at 4:09 AM #25118lostkittyParticipant
There are no family-sized “started homes” to buy near the coast. If your take on the situation were accurate, then we wouldnt be seeing the huge inventory increases in Rancho Santa Fe, Coronado, Solana Beach, Del Mar, Carmel Valley either. There arent enough “rich people” to buy all these homes…
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