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appraisals are based upon a definition of market value
formulated in terms of "the most probable price".
We note that the definition of market value of real
property formulated in terms of "the most probable price",
as contained on the FHLMC/FNMA forms, was not used in
FHLMC/FNMA forms until 1986. Announcement 86-11, made by
FNMA on April 24, 1986, describes the new wording of the
definition, effective for appraisals completed on and after
July 1, 1986, as follows:
It also defines the market value as the "most
probable price which a property should bring
* * *" as opposed to the "highest price which a
property will bring * * *" in the old version.
This change recognizes that the market value of
a property usually falls within a range and that
the indicated value is an estimate which should
not necessarily be at the highest portion of
that range. [Emphasis supplied.]
Mr. Brown's report states generally that the value of
single-family residences in the Houston, Texas, area
decreased significantly after 1983. His report states as
follows:
These homes closely followed the prevalent
Houston area real estate trends during the early
1980's. Values increased dramatically until 1983
when values declined sharply for the next 3 to 6
years.
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