When the Real Estate market is as active as it is now, with days on the market under 50 days and inventory less than 2 months, and buyers are facing bidding wars with multiple offers submitted, the question we ask ourselves is, are home values increasing a result.
Over the last week, I spoke to a few appraisers who specialize in Franklin County to ask them if they are giving any appreciation in their evaluations. Appraisers are permitted to use homes in their evaluations that sold up to twelve months. However, lenders prefer to see comparables less than six months if possible. So, if a house sold say ten months ago, would they give an increase adjustment to compensate for an increase in value?
The answer was fairly consistent. Because the market has been so active, in most cases, they can find comparable homes within a few months of sale, not needing to go back more than six months. As a result, they are not giving any added value, yet. This is not to say there haven’t been increases. Most agree that there are pockets of areas that are experiencing increased values, specific price ranges, and styles of homes, especially single-level homes, primarily because of the demand. The Market in essence is adjusting itself.
Supply and demand always will affect the market. With a low supply and a high demand, an increase in prices usually is the result. But, most appraisers will agree that it is not straight across the board, yet. As we go through the fall and winter, we should get a better picture of the effect this super active market has on home values
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