I just completed an appraisal of a single family house in Camas, Washington.  It is a 30 year old, 2,000 square foot place on a typical sized lot.

When I did the MLS search for sales data I did a statistical analysis of the data I found.  I looked at the data during the most recent three months and then at the data from the previous three months to that.

The analysis suggested that the market for that house had increased a 2% per month over the last six months.  And this, in the face of an ever declining market.

I looked at the whole Camas area and did a statistical analysis on it.  The result was that the market was declining at a rate of around 2.5% per month over the last six months.

So, in the face of the 1004MC (market conditions report) which do I report.  Is it up or is it down???

I say report both.  The macro market is going down.  The subject micro market is looking up.

However, statistical significance is an important consideration.  The “up” market was based on 4-5 sales.  The down market was based on 50-70 sales.  I think the larger sample carries the day.

Ralph K. Olsen, IFA

Pacific West Appraisal Services, Inc.

pwas.net