Feature article originally published in The Appraisal Journal Summer 2013 issue.
14 pages, PDF Download
This article looks at techniques for possible expanded market analysis under the Appraisal Institute Guide Note 12, Analyzing Market Trend,.
Guide Note 12 states that market value is dependent on expectations of what will happen in the market in the future.
The article suggests that a critical step in a market value opinion is analysis of market trends. This suggests that beyond a single-point-in-time value opinion, an appraisal might include an opinion regarding whether the value is sustainable. To make such predictions regarding future value trends requires a solid understanding of real estate market cycles.
This article discusses tools appraisers can use to identify and report where in the cycle a market is on the valuation date. That additional information can increase the usefulness of the appraisal and is an important upgrade to the role of the appraisal in market transactions and mortgage loan underwriting.
Kerry M. Jorgensen, MAI
Stephen F. Fanning, MAI
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