Property Valuation
What is 'market conditions adjustment' in sales comparison appraisal and why is it critical in Hawaii's dynamic market?
AA. An adjustment to correct for the appraiser's personal market bias
BB. An adjustment to comparables sold in the past to account for price changes between the comparable's sale date and the effective date of appraisal; essential in rapidly appreciating or depreciating markets✓ Correct
CC. An adjustment for the condition of the market comparable at time of sale
DD. An adjustment made when market conditions change after the appraisal is completed
Explanation
Time/market conditions adjustments compensate for the fact that comparable sales may have occurred months or years before the appraisal's effective date, and prices may have changed. In Hawaii's historically appreciating market, stale comparables may significantly understate current value. Appraisers use paired sales analysis or market indices to quantify market condition adjustments.
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