Appraisal adjustment for market movement between a comparable sale date and the valuation date.
A time adjustment is an appraisal adjustment for market movement between the date a comparable sale occurred and the effective valuation date of the appraisal.
Time adjustment matters because older sales may not reflect current market conditions. If prices have risen or fallen since a comparable sale closed, the appraiser may need to account for that change before using the sale as valuation evidence.
Borrowers often assume that a sale from several months ago should directly support today’s value. In a changing market, the date of sale can matter almost as much as size, condition, or location. Time adjustment is sometimes described as a market-conditions adjustment because it addresses how the market changed over time.
The analysis can support an upward adjustment in an appreciating market or a downward adjustment in a declining market. No adjustment can also be reasonable when evidence shows stable conditions, but the conclusion should follow analysis rather than an assumption that prices always rise.
Borrowers usually see time-adjustment logic in the comparable-sales grid or in the appraisal’s market comments. The term becomes practical when a report relies on older Comparable Sales (Comps) because few recent sales are available.
It can also matter during an Appraisal Review or Reconsideration of Value request if a borrower argues that the report ignored a recent market shift.
The relevant starting point is often when the comp’s price was agreed under contract, because that is when buyer and seller market behavior produced the price. The appraisal then interprets that evidence as of the Effective Date of Appraisal. Closing date remains important transaction data, but it may occur weeks after price negotiation.
| Appraisal question | Why timing matters |
|---|---|
| When did the comp go under contract or close? | The sale date affects how current the evidence is |
| Has the local market moved since then? | Rising or falling prices can change the value indication |
| Are newer sales available? | Recent sales may require less timing interpretation |
| Is the adjustment supported? | The report should make the timing logic understandable |
Support may include paired or grouped sales, repeat sales, home-price indices, statistical analysis, or market models. A broad regional trend may need refinement before it reliably describes the subject’s local market segment.
A 12-month market trend does not automatically become the adjustment for every sale. The appraiser analyzes the period from each comparable’s contract date to the appraisal’s effective date. If prices rose early in the year but were stable during a particular comp’s interval, that comp may need little or no adjustment even though the annual trend is positive.
The reverse can also occur: a modest annual trend can hide a sharper movement during one comp’s relevant period. Each adjustment, including zero, should be consistent with the identified market segment, dates, data source, and method described in the report.
Time adjustment is not a forecast of future appreciation. It is a way to interpret past sale evidence as of the appraisal’s effective date.
A comparable went under contract six months before the appraisal’s effective date at $400,000. Supported local analysis indicates that similar homes declined about 3% between those dates. A downward time adjustment of roughly $12,000 may be appropriate before other property differences are considered. The adjustment brings old evidence to the valuation date; it does not predict the next six months.
Time adjustment differs from Location Adjustment because time adjustment addresses market movement between dates, while location adjustment addresses differences in market setting.
It differs from Condition Adjustment because condition focuses on physical quality and repairs, while time focuses on market change.
It also differs from Market Value. Market value is the value concept being supported; time adjustment is one step in interpreting older sales evidence.
It also differs from the effective date itself. The effective date fixes the point in time for the value opinion; the time adjustment translates earlier market evidence to that point.