The Most Popular Article From Last Week’s Newsletter: Former Appraiser’s Hot Dog Stand!! FYI, unusual and weird stuff is very popular with appraisers ;>

Three-story Single-family Homes and Townhomes

Excerpt: Of the 729,000 single-family detached homes started in 2017, a little over 18,000 (2.5 percent) had three or more stories, according to National Association of Home Builder tabulation of recently released Census data.

In contrast, the 23,000 3-plus story townhomes represent 22.0 percent of single-family townhome starts.

More info here:

My comment: 3 story detached homes are not popular in very many areas. It is a long walk up to the 3rd floor. I have appraised them (attic conversions of a classic older home to a master bedroom, for example). I always look to see if an elevator can be added – usually has to be on the exterior of the home. Definitely a functional problem. I rarely see them on existing homes, except for attic conversions. Some newer detached homes have a small room on the 3rd story – family room, extra bedroom, etc.

For townhomes, I have seen a significant increase in 3 story new construction townhomes in my city (within the past few years) and other Bay Area cities. The first floor is a garage plus entry, second floor living room and kitchen, bedrooms on 3rd floor. Very profitable for home builders, especially in areas with high land prices and infill tracts. I have appraised them and the owners did not object to the 3 floors. There are sometimes a few townhomes that are 2 story.

My first apartment when I moved to San Francisco in my 20s was a third floor walkup. I vowed Never Again ;>

Portable Architecture You Can Roll, Wear, Tow, or Float

A sauna on skis and 11 other dwellings made to move.

Just For Fun!!

Excerpt: Here are a few:
– The Nomad Sauna, built on a lake in Norway, is transported on skis and comes with an internal ice hole for (quick) plunges into the freezing water below.
– This cargo bike, called the 8rad2 Solar, has eight wheels, two drivers and can be used to transport cargo or as a mobile home
– The Zendome allows campers to drift along the water in style.

Great fotos!!

Waterfront Home Premium Narrows

The premium for living on the water isn’t as high it used to be. Homes along the water sold for a 36% premium in the first quarter of 2018, according to a new Zillow® analysis. The extra cost for waterfront living is at its lowest level since the second quarter of 2002, and below the average premium since 1996 of 41%.

My comment: I lived in waterfront homes for over 25 years (estuaries of San Francisco Bay. They vary quite a bit, which is not in the databases used by Zillow. I lived in one across a narrow estuary from a scrap yard. Another had a wide estuary view but the house was set back from the water by a large rear yard so the view was not very wide. Boat dock size is often a big deal also.

Online Home Value Estimates Are NOT Appraisals (From NAR)

Excerpt: the number one caveat for consumers is that these estimates are not a substitute for formal appraisals, comparative market analyses, and the in-depth expertise of real estate professionals. Nonetheless, it is important to know the different sources of Automated Valuation Models or AVMs and home value estimates available online

My comment: Good list of the different AVMs that are available online for free. I wish AVMs would publish some sort of reliability/accuracy statistical info. As we all know, AVMs are best in conforming tracts less than 10 years old and goes downhill after that, but most people don’t know this.

Getting too many ad-only emails?

   4 ways to get only the FREE email newsletters

and NOT the ad-only emails.

1. Twitter: (same time delivery) – all recent newsletters
2. Appraisal Today blog  (posted by late Thursday) Sign up for email notifications when a new email newsletter is posted.
3. Email Archives:  (posted early Thursday) Newsletters start with “Newz”. Contains all recent emails sent.
4. Link to 5 most recent newsletters (no ads) at scroll down past the big yellow signup block.
When you have set up one of the choices above and  it is working, you can unsubscribe from this email list, which includes getting ads, click the unsubscribe button at the bottom of every email newsletter.
For more info, such as why I take ads, etc.
at ad

To purchase the paid Appraisal Today newsletter go to   or call 800-839-0227.

If you are a paid subscriber and did not get the July 2018 issue, emailed Monday, July 2, 2018, please send an email to  and we will send it to you!! Or, hit the reply button. Be sure to put in a comment requesting it.

Auction Prices for Homes

When there is a market with multiple offers way over list, I call them “Auction Prices”.  

Recently, a real estate agent asked me how appraisers were doing with “low appraisals” (while I was on the weekly open house tour to see listings and get a free lunch). I get this question frequently. First, I disclose that I have not appraised for lenders since 2005, but I do remember periods of big price increases with multiple offers in the past.

I explained that appraisers use market value (most probable sales price), not the highest possible price. (This definition changed in the late 1980s but I seemed to be the only one at that time who thought it made a big difference in value.) Sometimes highest price is used, such as eminent domain appraisals.

A few suggestions I made:
– One sale does not make a market. If there was a home you wanted your whole life that was available for purchase, you would pay whatever it cost. Or, you had been overbid 10-15 times and wanted really badly to finally buy a house.
– There is a bell shaped price curve from low to high. The top of the curve is the most probable price. The right side is the highest possible price. The left side is the lowest possible price.
– If you want to get your deal to close, help the appraiser as much as possible – find listings, pendings sales similar to the subject. Especially useful are pending sales if you know if it went way overlist or not. You make a lot of money as compared with the appraiser who is working for an AMC.
– Always meet the appraiser at the house, to answer any questions, hold “dumb end of tape”, be “nice”.

FYI, I have been appraising for over 40 years and have never seen this market last so long and be so strong. I am glad I bought my home in 1985 ;>

FHA class in Portland Oregon August 9, 2018

Course Title: NEW
Completing Today’s FHA Appraisal
Thursday, August 9, 2018, 8:30 AM to 5:00 PM (Pacific)
Check-in begins 30 minutes before the start of the session.
Event Location:
Edith Green-Wendell Wyatt Federal Building
1220 SW Third Avenue
Conference Room #1A and B
Portland, OR 97204
Jurisdictional Host:
Santa Ana Homeownership Center
Registration Link:
This one-day instructor-led training course will cover FHA appraisal requirements, including FHA appraisal protocol and updates to FHA appraisal policy. This course is ideal for seasoned FHA appraisers, appraisers new to the FHA Appraiser Roster, as well as those working toward appraiser licensing.
While the course is ideal for seasoned FHA appraisers, appraisers new to the FHA Appraiser Roster, as well as those working toward appraiser licensing. Due to limited seating in this venue, this training is open only to appraisers.
This course is approved by the states of California and Oregon for seven hours of Continuing Education Units/Credits (CEUs) for licensed appraisers. Please contact your respective state’s licensing board for credit eligibility.
Special Instructions:
Advance registration is required; seating is limited and available on a first-come, first-served basis. Walk-ins are welcome, but attendance is not guaranteed. Lunch is on your own and on-site parking is available for a fee.
This free training is being held in a government facility. Be advised that the on-site security screening is similar to an airport security screening. Attendees must provide a valid, government-issued photo I.D. and course registration confirmation at the guard station. Please allow extra time to go through the screening process. For more information, contact Briyanna Talley via email at: or via phone at 714-955-0763.

Video: ASB Online Briefing – Proposed Changes for 2019-2020 USPAP

May 18, 2018

Listen to Maggie Hambleton, ASB Chair, and John Brenan, Director of Appraisal Issues at the Foundation, as they discuss the proposed changes in the First Exposure Draft for the 2020-21 USPAP (Recorded on June 8, 2018).
Length 51:43 minutes

My comment: for those who prefer to listen, rather than read, USPAP ;>
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
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 or send an email to . Or call 800-839-0227, MTW 7AM to noon, Pacific time.

Mortgage applications increased 2.5 percent from one week earlier

WASHINGTON, D.C. (July 11, 2018) – Mortgage applications increased 2.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 6, 2018. This week’s results included an adjustment for the Fourth of July holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 2.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 18 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week to its lowest level since December 2000. The seasonally adjusted Purchase Index increased 7 percent from one week earlier. The unadjusted Purchase Index decreased 15 percent compared with the previous week and was 8 percent higher than the same week one year ago.
The refinance share of mortgage activity decreased to its lowest level since August 2008, 34.8 percent of total applications, from 37.2 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 decreased to 10.0 percent from 10.2 percent the week prior. The VA share of total applications increased to 11.3 percent from 10.7 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 4.76 percent from 4.79 percent, with points increasing to 0.43 from 0.41 (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 4.68 percent from 4.71 percent, with points decreasing to 0.24 from 0.43 (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 increased to 4.80 percent from 4.78 percent, with points increasing to 0.75 from 0.73 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.18 percent from 4.22 percent, with points decreasing to 0.46 from 0.47 (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 increased to its highest level in the history of the survey, 4.13 percent, from 4.03 percent, with points increasing to 0.36 from 0.25 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week. MBA began tracking interest rates on 5/1 ARMs in January 2011.
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

We want to know what you think!! Please leave a comment.