Time Adjustment (Market Conditions Adjustment)
An adjustment applied to a comparable sale to account for changes in market value between the date of the comparable's sale and the effective date of the appraisal. Required when market conditions have changed.
Time adjustments are necessary in appreciating or depreciating markets. If the market has appreciated 5% since a comparable sold six months ago, a positive time adjustment of approximately 2.5% (half of the annual rate) would be applied. Time adjustments should be market-derived — extracted from re-sale analysis, listing-to-sale time studies, or median price trend analysis. They should not be based on published indices alone. The need for time adjustments increases with the age of the comparable sale and the rate of market change.
Related Terms
Market Conditions
The current state of supply and demand in the real estate market for a particular property type in a defined area.
Adjustment
A dollar or percentage modification applied to a comparable sale's price to account for differences between the comparable and the subject property.
Comparable Sale
A recently sold property that is similar to the subject property in terms of location, size, condition, and features, used as evidence to support the appraiser's opinion of value in the sales comparison approach..
Paired Sales Analysis
A technique used to estimate the value contribution of a specific property feature by comparing two sales that are identical except for that one feature.
More in Market Analysis
View allAbsorption Rate
The rate at which available properties are sold or leased in a specific market during a given time period.
Days on Market (DOM)
DOMThe number of days between when a property is listed for sale and when it goes under contract.
Months of Supply
The estimated time it would take to sell all current listings at the current sales pace, calculated by dividing active inventory by the average monthly sales rate.
Exposure Time
The estimated length of time a property would have been offered on the market before a hypothetical sale at the appraised value on the effective date.