Nationally reported trends and State ‘overall’ trends have little direct correlation to what is happening to real estate in Torrance or Compton or San Bernardino, California.

My distrust of the so called ‘regression based’ software being touted as reliable or “accepted by all lenders” is more skeptical than your own. The blogs have been full of discussions on their shortcomings by people with far more knowledge than I have. Bottom line is that the sample sizes used most often are typically too small to produce meaningful or credible results as they are applied (imho). I’ve yet to see one produce CREDIBLE results for GLA adjustments in any markets I work in. (SHAME on those naughty buyers for thinking GBA has either more of less value than the commercial regression software statistics show! How DARE they?)

I take such articles as no more than reminders to recheck my data carefully and to be able to explain contrary local data in light of widely published articles that might become a concern among intended users. National Increases in median values are better than deceases in median values, but they do not tell what’s happening in Utica, NY or Havre de Grace, MD.

I was an agent for 6 years before becoming an appraiser 30 years ago. I didn’t know appraisal principles but I could sure tell you when prices were rising or in a slump.

Some of the ‘old’ skills still work. 1. How long are properties taking to sell the first time around for listings? For over 40+ years in my market areas it should be between 30 to 90 days normally-minor variances occur. 2. How many listings are there of the most commonly sought property types? This includes awareness of the presence and impact of REOs, short sales and foreclosures 3. Are MOST asking prices higher than last month for similar property; or the same? 4. Are the list to sale price ratios narrowing or widening? 5. Are concessions present or not?

Answer the above questions, coupled with knowledge of local norms and you will never be wrong about trends. You may not be able to “prove it” but you can certainly explain it credibly.

What no one is telling us or able to accurately predict is at what point this upward pressure will taper off due to the ongoing decline in EFFECTIVE demand versus apparent demand. Purportedly only 30% can afford or qualify for the median house these days; with 20% down and a 3.95+-% 1st TD.

I’d love to see the talking heads publish a study on the percentage trend of buyers for lower than median homes contrasted with percentages for above median housing to see either is rising, falling or remaining the same. While they are at it, opine as to what point it will be when rising prices outstrip ability to qualify (honestly) at the lower end.

Im no economist. Heck I don’t even have a college degree, but I bet it will be about, or shortly after the same time as when GSE Lenders (FNMA) start offering 3% conventional loan down payments; promoting low interest-high LTV ARMs, lowering FICOs, increasing allowable debt to income ratios and permitting stated income loans again.

Gosh! That’s about NOW. Any bets the Fed will NOT significantly raise interest rates in September?

Koma