• Hi Tyrone,
    First you need to figure out the average % of decline in your area per month, then for comp properties listed over 90 - 120 days I minus that % out for the number of months over either the 90 or 180 marker. I also take into consideration the area of town for my DOM average because 'hot' areas tend to have an shorter average DOM, where 'not as desireable' areas tend to have a longer DOM.

    Simplified Example:
    Say your market area is declining 1% per month.
    A comp you are using is priced at $200,000 and has been on the market for 365 days. Using the 120 adjustment, just minus the 1% decline for 6 months or $200,000 minus 6% = $188,000. Then take the difference as an adjustment value which would be <$12,000>. However, be sure to check the listing history of the compable you are using to check to see if the agent has not already been reducing the listing price the approprate %.
    Hope this makes sense.
    • Linda, you are a wealth of information! Thanks for sharing this calculation, it's very helpful.

      Regina P. Brown
    • Thanks a lot Linda.
  • I generally do my adjustments for comps if it is over 100 days they I would make an adjustment of 5% or more depending on the subject or its location. Otherwise, i do not have a concrete formula.
  • I usually say that the market in this area is declining __% (5 or 10 or whatever), and on a ____ basis (monthly, quarterly, etc.). But no formula, just my personal knowledge & experience.
    • Thank you Regina
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