Appraisal News and Business Tips

11-9-17 Newz// Spite Homes, Appraiser Coalitions, Mortgages and Property Taxes

9 Unique Spite Houses

Excerpt:
Here are a few:
Tyler-Spite House – Frederick, Maryland
Montlake Spite House – Seattle
Equality House – Topeka, Kansas
The Cake House – Gaylordsville, Connecticut

Thanks to long time subscriber, and old friend, John Regan for this Most Excellent Link!!
Get more info and read the fun intro and fotos at:

My comment: The first house on the post is here in Alameda – 10 ft. wide plus “pop outs” on second floor. I saw it a few years ago when it was listed. It had a reasonably good floor plan and was on a corner so it had good interior light. The writeup made me think about my neighbors from hell that I would like to put a giant something between us. Or, do something ugly or strange to my house ;>

Top 10 best and worst places for a natural disaster

Excerpt: Sperling’s BestPlaces revealed the Top 10 Safest Places to avoid natural disasters, with three of them located in California and Portland leading the pack.
The data analyzes eight risk factors weighted by severity and frequency of the threat. The most important risk factors were tornados and hurricanes, then flooding and earthquakes, and drought, hail, wind and wildfires were considered less impactful.
“We created this list to help the many people who are worried or fed up with the danger and recovery after natural disaster,” says Bert Sperling, Founder of BestPlaces.net. “Even just the threat of an event can be very disruptive, which can happen several times annually.”

This data is based on 30 years of hazardous weather trends. Bestplaces.net also compiles other pertinent location data including cost of living, crime, schools, and anything else needed to make a sound decision on where to live.
Some might find it surprising that several California places rank in the top ten, given the earthquake risk on the West Coast. Sperling explains, “We considered the risk from a major earthquake to be less than that from hurricanes or tornados. It’s entirely possible that one could spend a lifetime in California and never be impacted by an earthquake, while hurricanes and tornados can occur regularly.”

My comment: Very interesting. I am 10 miles, 25 miles and 90 miles from 3 of the worst. But, we don’t have hurricanes!! I grew up in Oklahoma – Tornado Land, but it never bothered me much. We just went to the “root cellar” or basement.
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State Organizations & Appraisers Helping Appraisers

Excerpt: You may have heard the expression “if you do not have a seat at the table, you are on the menu.” VaCAP can honestly state, appraisers are not on the menu.
Over the past several weeks, members of the Network (NSAO), which has now grown to 28 state organizations, have been recapping the events that transpired at the meetings in Washington D.C. last month. These meetings consisted of the FHFA meeting, the NSAO meeting, the ASC meeting, and the AARO conference.
My comment: I was unable to find a list of members of NSAO online or a list of appraisal advocacy groups, but you can send a message on the Facebook page. Or, google (your state) appraisers advocacy group for example. You should already know the active organization in your state. Not all states have one. California does not.

I write regularly in the paid Appraisal Today about how to communicate with other appraisers online and face-to-face.

I was very lucky when I started my appraisal business in 1986. There were local chapters of SREA and AIREA that met for monthly dinner meetings about 15 miles from my office. The networking and info sharing was fantastic. But, after licensing, this all changed as few appraisers joined the national associations.

Today 28 states or more have advocacy groups, which is a great place to meet face-to-face with other appraisers. Here is the Facebook page: The Network of State Appraiser Organizations

2017 year-end tax planning for appraisers
What you can do now to save on your 2017 taxes!!

 

In the November 2017 issue of the Paid Appraisal Today!
 
Two of the many appraiser Tax Tips: 

SEP-IRA and Solo 401k contributions are not taxable until
withdrawn and can save you Big Money on taxes. For 2017, if you are making money, consider contributing to (or starting) a SEP-IRA or Solo 401k. When I have a very profitable year, I put the maximim allowed into my SEP-IRA. Since I am over the age of 59½ I can withdraw money at any time without paying a penalty.
Charitable contributions Clean out your closets every other year and contribute your unwanted items to a charity for a deduction. Be
sure to get a receipt for all donations and contributions, regardless of the amount. Photos can also work well for verifying your donations. You can contribute by using a credit card by 12/31/17. Then pay it off when you receive your credit card statement. I always do year-end charitable contributions.
To read the full article, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.
 
If this article saved you $100 on your taxes, it is worth the subscription price!! 

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Mortgage Interest Deduction – Controversial!!

Here are a few links that discuss it.

Jonathan Miller’s Housing Notes Nov. 3
Housing and the Proposed Federal Tax Cuts

Lots of good links for commentary.

Excerpt: The House GOP has presented a new tax bill that seems to target the U.S. housing market. Although I expected a reduction of the mortgage interest tax deduction, the proposed bill targets high-cost cities in some other ways – perhaps these are merely unintended consequences.

Scroll down to the headline which is near the top. Plus check out the other interesting videos, graphs, comments, etc.
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Who loses out on Republican plan to cut mortgage-interest deduction?
Map shows most affected areas

Excerpt:
Among 2,294 counties included in this analysis, those with the highest share of loan originations above $500,000 were Teton County (Jackson Hole), Wyoming (49.2 percent); District of Columbia (35.1 percent); Falls Church City, Virginia (34.6 percent); Arlington County, Virginia (29.6 percent); and Nantucket County (Martha’s Vineyard), Massachusetts (29.2 percent). Among those same counties, those with the highest volume of loan originations above $500,000 so far in 2017 were Los Angeles County, California (28,523); Orange County, California (15,527); San Diego County, California (12,739); Santa Clara County, California (11,322); and King County (Brooklyn), New York (11,110).

Check out the graphic of who is affected most and least. Link also includes a heat map of who is most affected by property tax proposed changes.
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The GOP Targets America’s Most Loved and Hated Tax Break

Excerpt: If there is one part of the tax code that is almost universally excoriated by economists, it is the mortgage-interest deduction. Emerging from a 1913 provision that allowed business owners like farmers to deduct any interest they paid on business expenses, the mortgage-interest deduction now lets people who buy homes deduct part of the cost of their mortgage on their taxes. According to the Joint Committee on Taxation, it saved Americans $77 billion last year-$77 billion that would otherwise have gone to the government. Liberal groups have long targeted the deduction, arguing that it disproportionately benefits white and wealthy homeowners while leaving out people who don’t own homes, or who don’t itemize their taxes, and who thus can’t take the deduction.

So it seemed initially surprising when the tax bill … proposed capping the mortgage-interest deduction, which has long been off-limits in American politics.

My comment: I always wonder when, and how, tax deductions started!! This article, from The Atlantic magazine, has an interesting analysis from different angles.
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My overall comments on the mortgage interest tax deduction: Not sure how it will affect appraisers. It may affect refis and sales in high priced home areas.   Of course, no one knows what the final bill, if passed, will include. I live in a high housing cost state but must remember that most of the country will not be affected by this. Also, many other countries do not have mortgage interest deductions, including Canada.

Property Tax Deduction – who pays the most?

Best and worst states for property taxes
Note: reprinted from a previous email newsletter. Much more relevant now!!

The highest tax rates were New Jersey, Illinois and New Hampshire. The lowest tax rates were Hawaii, Alabama and Louisiana.

The tax range for a $176,000 home was $489 (Hawaii) to $4,029 (New Jersey)

How are taxes in your state?

Check out the very interesting graphs and tables at the Wallet Hub link below.
My comment: I am so glad I am in California!! We know what our property taxes will be, subject to local supplemental taxes. In 1979, “Proposition 13” passed, limiting tax increases to 2% per year except for improvements. This is one of the reasons there is a very low inventory of homes for sale. Plus the significant capital gains when sold if you purchased when prices were low.
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HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, go to www.mbaa.org 
Note: I publish a graph of this data every month in my paid monthly newsletter, Appraisal Today. For more information or get a FREE sample issue go to https://www.appraisaltoday.com/products.htm or send an email to info@appraisaltoday.com . Or call 800-839-0227, MTW 7AM to noon, Pacific time.

Mortgage applications remained unchanged from one week earlier

WASHINGTON, D.C. (November 8, 2017)  -Mortgage applications remained unchanged from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 3, 2017.

The Market Composite Index, a measure of mortgage loan application volume, remained unchanged on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The Refinance Index decreased 1 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 9 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 49.0 percent of total applications from 48.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.6 percent of total applications.

The FHA share of total applications increased to 10.6 percent from 10.4 percent the week prior. The VA share of total applications increased to 10.0 percent from 9.9 percent the week prior. The USDA share of total applications decreased to 0.7 percent from 0.8 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) decreased to 4.18 percent from 4.22 percent, with points decreasing to 0.38 from 0.43 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) decreased to 4.12 percent from 4.16 percent, with points decreasing to 0.24 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.05 percent from 4.07 percent, with points decreasing to 0.43 from 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.51 percent from 3.52 percent, with points remaining unchanged at 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs remained unchanged from the week prior at 3.33 percent, with points increasing to 0.59 from 0.50 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.

Ann O’Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
2033 Clement Ave. Suite 105
Alameda, CA 94501 Phone 510-865-8041
Fax 510-523-1138
Email   ann@appraisaltoday.com

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