Neighborhood Analysis
The appraiser's evaluation of the area surrounding the subject property, including property values, market trends, land use, demographics, and external factors that influence value. A required section of every residential appraisal report.
Neighborhood analysis defines the boundaries of the subject's competitive market area, describes the property types and price ranges within it, and evaluates factors such as proximity to employment, schools, shopping, transportation, and negative influences. The appraiser must report whether property values are increasing, stable, or declining, and provide supporting data. UAD 3.6 expanded the neighborhood analysis section with specific data requirements for market metrics including months of supply, median sale price trends, and new construction activity.
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.
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.
Days on Market (DOM)
DOMThe number of days between when a property is listed for sale and when it goes under contract.
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..
Location Analysis
The evaluation of a property's position relative to surrounding land uses, transportation, employment centers, schools, amenities, and negative influences.
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.
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.
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.
Marketing Time
The estimated time it would take to sell a property starting from the effective date of the appraisal, looking forward.