4-12-18 Newz//What’s a Comp? Multiple offers way over list. Rotating House

Excerpts: Our education tells us a comp is similar and competitive. So how do we measure “comparability”? If our job entails studying market data to get an answer … might it be important to know exactly how to describe a comp?

So what’s the issue? Why should we care? I am a highly trained expert. I have a license. “Trust me. I know a good comp when I see one.”

My comments: George is writing a longer article than his blog posts for the May issue of the paid Appraisal Today. I often wish his blog posts were longer, but they are designed to be short ;>

Excerpt: The wood-clad home sits atop a meter-wide pillar base, and can swivel both directions via mechanical control. It’s built to be ultra-lightweight with a steel frame and walls made from wood paneling, so it requires less energy to rotate.

More photos and info, plus links to other rotating houses:

Excerpt: Curious to know what buyers really want in a home, MONEY asked real estate listings website Trulia to compile a list of the houses in each U.S. state that potential buyers most often bookmarked for future reference. Despite different locales, styles and amenities, the vast majority of the homes most desired by Trulia’s millions of users have a single thing in common: affordability.

My comment: If all my family did not live here, I would be thinking about moving! Sell my place for $850,000+ (median price in my city, purchased for $125,000 in 1/86) and buy a mansion!!! Or a median priced house for $125,000 and live on the rest.

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Excerpt: It is easy to miss the market. Sometimes subtle changes are occurring and it is too early to pick up on a trend. Or there is conflicting information indicating both an increasing and a declining market at the same time, depending on the market segment.

If appraisers had crystal balls into the future, we would be doing something other than appraising. The money would be in predictions, not in measuring the current market. We are expected to be in touch with the market however, but basing our opinions on past, closed transactions is not necessarily the current market. This is one reason analyzing current offerings, pending sales, expired and withdrawn listings, and listening to the chatter of those involved in real estate sales is important.

Well written and worth reading

My comments: Rachel Massey is a regular contributor to the paid Appraisal Today. She loves to write!!

I have a lot of experience with changing markets. At my first job at a CA assessor in the late 70s, prices were going up 2% per month. Then, interest rates went up to over 18% and the market crashed. In 1986, rates went down and prices skyrocketed, then crashed in the early 1990s (30-40% drop), then went way up in the 2000s (up to 5% per month), then crashed in 2008 (30-80% drop). About a year ago prices stabilized in my market (condos still going up) but other nearby cities are still having significant price increases. Although I quit making adjustments on form appraisals a few years ago, I still do market condition adjustments, the easiest adjustment to make.

I have always used listings, pendings, expireds (for res and commercial) to tell me what is really happening and especially when it is changing. Unfortunately, many appraisers only looked at “comps”. I have always looked at the data that Rachel uses.  Commercial appraisers seldom looked at listings, pendings, etc. here even though the information was readily available for the past 20 years on Loopnet, a very reasonably priced Sacramento-based listing service. It was purchased by Costar a few years ago and is now very expensive.

WASHINGTON, D.C. (April 11, 2018) – Mortgage applications decreased 1.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 6, 2018.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.9 percent 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 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 0.5 percent lower than the same week one year ago.

The refinance share of mortgage activity decreased to its lowest level since September 2008, 38.4 percent of total applications, from 38.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.3 percent of total applications.

The FHA share of total applications increased to 11.0 percent from 10.1 percent the week prior. The VA share of total applications increased to 10.9 percent from 10.3 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.66 percent from 4.69 percent, with points increasing to 0.46 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 $453,100) decreased to 4.53 percent from 4.56 percent, with points increasing to 0.31 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 4.66 percent from 4.74 percent, with points increasing to 0.76 from 0.54 (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 4.08 percent from 4.09 percent, with points increasing to 0.50 from 0.42 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to its highest level since February 2011, 3.93 percent, from 3.87 percent, with points increasing to 0.60 from 0.28 (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.