Definition
Time adjustments account for market value changes between comparable sale date and current appraisal. In appreciating markets, older comparables get adjusted up. In declining markets, adjusted down.
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Time adjustments account for market appreciation or depreciation between the comparable's sale date and the current valuation date. In rapidly appreciating markets, older comparable sales may require upward adjustments; in declining markets, downward adjustments may be needed. Time adjustments are typically expressed as a percentage appreciation or depreciation rate per month or quarter. These adjustments require careful analysis of market trends to be accurate.
Pro Tip
Recent comparables (within 60-90 days) are most reliable. Older sales require larger adjustments introducing more uncertainty.
Example
A comparable property sold for $420,000 eight months ago in a market appreciating at 1.5% per quarter. A time adjustment of $12,600 (3% annual appreciation) is made to reflect current market conditions, resulting in an adjusted comparable value of $432,600.