One or a few matched pairs is hardly conclusive proof of a market trend.
Matched pairs are flawed as at technique and essentially meaningless because they can achieve ANY result you want them to by simply searching for a pair that supports your desired conclusion.
It is always a treat in litigation consultation/support to get an appraiser on the other side using paired sales to prove an idiotic (inflated or deflated) adjustment and then "pair" his or her other sales for the same component or other components.
Years ago, when I did my narratives to earn my former SRA and IFA designations, I used homes in nearby Levittown (NY) for my subject properties. I had to go thru MANY MANY dozens of sales in each case to come up with two that could "prove" any given adjustment. This was in a vast sea of originally identical homes, probably as ideal a comp pool as could be desired.
While paired sales can be misused/manipulated, my primary objection to them is that they simply represent two random indications from a highly imperfect market that more often than not are meaningless.
I did not make up my demo report analogy. In both instances, in an extremely homogonous market, I had to test in excess of 50 nearly identical (in all but one or two significant differences) pairs to find one that supposedly "proved" any adjustment result that wasn't absurd...
Unfortunately, paired sale analysis assumes a much more efficient marketplace than that which exists in the real world, and therein lies the fundamental flaw in this method. Stated differently it assumes that all market participants view all components (to value) equally with similar expectations and motivations that also rarely exist. People buy what they buy for many different reasons (motivations). Many times they buy in spite of a feature that has no particular value or use to them. Almost All home purchases involve some degree of settling for a multitude of factors that often can't be quantified.
I personally try to find sales that have as high degree of similarity to the subject as possible and keep highly subjective adjustments to a minimum. I spent many years as Realtor (before and during the early years of my appraisal practice) and nothing has been more useful to me than observing market participants reaction and their desire to pay for or not pay for different items... I spend quite a bit of time on every assignment talking to the homeowners or purchasers and probing them about their likes, dislikes and desires. I always inquire about the cost of recent improvements and significant amenities. I ask if different features influenced their decision to buy. I have many Realtor friends whom I frequently use as a sounding board when I come across something atypical.
I wish the industry would divorce itself from paired sales analysis. It is an outdated and flawed method that has no statistical validity and bears no cognizant relationship with the market.
my 2 cts...
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