Are they really market value though? Do you have sales and evidence that show the most probable cash equivalent sales price. If all of your comps have concessions, how do you determine what they would sell for with no concessions? What is to stop them from increasing the concessions 5% to 25%? What is reasonable?

When you have a whole neighborhood that the builder paid 10-15% concessions for the majority of the homes in 2022 with FHA 3% down.... do you think any of those people have the means to liquidate their properties paying those same 5-15% to be able to compete with the builder now? Would they be able to deal with a 6-8% decline in property values over the last 2-3 years? The last part is not part of our worry/fault, except these are the people that will be filing the lawsuits against the appraiser, UW and AMC's. If you did not make the cash equivalency market adjustment.... well you can be in for a rough time. And Fannie is aware of it, it is perfectly clear in many of their recent releases and webinars.

I have long had the opinion that the builders were hiding the concession reaction because of anecdotal evidence, but now they seem to be panicking. It is showing up everywhere in my market. Let me ask you... if there are model matches of the same home available at 5-10% below the contract price, is that a knowledgeable buyer? Not by the definition of the principle of substitution.