ARV in a crashing market

[Ashwin C.]

As of what I understand about the current market, house prices are going down. How do you factor in the declining house prices when trying to estimate your ARV? For example, if I buy a house for 25k and put another 25k in renovations and it takes 3-4 months to rehab it and I estimate the ARV to be 100k. During the renovation period, house prices decline and thus the ARV goes down. How do you guys factor it in?

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Quote from @Ashwin C.:

As of what I understand about the current market, house prices are going down. How do you factor in the declining house prices when trying to estimate your ARV? For example, if I buy a house for 25k and put another 25k in renovations and it takes 3-4 months to rehab it and I estimate the ARV to be 100k. During the renovation period, house prices decline and thus the ARV goes down. How do you guys factor it in?

Yep. it's a tough one. I am trying to guess what ARV and interest rates will be 6 months from now. So far the best guess I've come up with is a 10% decline in value and 1% increase in rates. So a $500,000 property will be worth $450,000 and instead of 7% interest rates they will be 8%. And it could be a lot worse than that.