Fall 1993 Edition of Property Valuation Monitor
Copyright © 1993 Property Valuation Advisors
In recent appraisal surveys many complained that we appraisers unduly rely upon yesterday's data for making forecasts. Just prior to real estate values taking the plunge a survey showed that appraisers concluded that appreciation of property values would continue.
If one were to go to the North Pole and see the sun continually shine 24 hours a day, one might conclude at some point that this phenomenon will continue indefinitely. Most know, however, that conditions and trends rarely continue unless the underlying causal forces persist.
To evaluate and forecast real estate values accurately, therefore, we as appraisers should identify the forces behind a current situation. We should then ask ourselves if these forces are likely to continue. A forecast should be more than an extrapolation of previous experiences. A forecast should include the impact of likely changes in governmental, economic, social, and environmental forces. By recognizing these larger forces in our analysis, not only will it allow us to add dimension to our reports, but also very likely it will allow us to improve the accuracy with which we make our forecasts.
The author, Stephen Traub, ASA, is Chief Commercial Appraiser for Property Valuation Advisors, Newburyport, MA. He is a certified general appraiser in NH, ME and MA. He can be reached at (508) 462-4347 or by e-mail at: firstname.lastname@example.org.
Other articles in this Fall 1993 issue of PVM include: How's Your Appetite for Points; Review of: The Office Building, From Concept to Investment Reality by White (Published by the Counselors of RE); Commercial Mortgage Survey; Northern New England Vacancy Survey; Notes:.
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