(from Rob Chrisman’s email newsletter)
And wouldn’t home loans be streamlined if the owner of the loan/investor didn’t care about the value? No appraisals! On the flip side, what if every home loan required three appraisals? That would sure bog thing down. The topic of waiving appraisals (who, what, where, when, why) is a hot one. The general belief is that the PWI is not as much predicated on the home, nor the loan structure, and more in the availability of prior appraisals in the area. Appraisals being in “machine language” making them readable, and the data more subject to compiling and valuation algorithms is hot stuff. And some wonder that if Freddie and Fannie are under government conservatorship, could that information be subject to a FOIA request?
To read more, click here NOTE: The appraisal waiver section is down the page. Easiest to search for appraisal waiver.
My comment: I have been subscribing to Rob Chrisman’s newsletter for a long time. It focuses on lenders and mortgage originator news, but sometimes has some interesting material on appraisals. In this one, there is some analysis from the appraiser side. Nothing new for appraisers, but it is always good to see what loan officers and lenders are reading.
Is Open Data in Commercial Real Estate a Pipe Dream?
The property industry has had its own push towards open data. Redfin and Zillow are able to syndicate what were previously private residential listings after years of effort and an eventual DOJ ruling against local Realtor organizations and their Multiple Listing Services. Spencer Rascoff, Zillow’s co-founder and CEO, went on the record to say that “Anyone whose business model is predicated on the assumption that their secret data will remain secret and proprietary, that’s not a sustainable business model. This data will inevitably be free.”
But commercial real estate is not residential. Even though sales records are public, just like their residential counterparts, commercial properties don’t change hands often and so rely on lease revenue as the main way to estimate their market value. These lease terms have always been private, a confidential agreement between the landlord and the tenant. This was an asset for large real estate firms or those with heavy geographical or sector-specific focus, giving them the ability to understand the market better than their competitors and conduct the information arbitrage that the property industry has always relied on.
Worth reading for both res and commercial appraisers. Good analysis of government data. To read more, click here
My comments: Commercial and residential data for appraisals has been going farther apart every year.
Residential appraisers are no longer “keepers of the data” with MLS listings and sales and “values” from Zillow, etc all over the Internet for free. Fannie wants appraisers to focus on analysis, not data collection.
Commercial appraisers are still “keepers of the data”. In my market, Costar has been around since the 1980s and is much more expensive than any MLS. The data is not often very good, but it often provides contact info. Mostly missing is accurate income and expense information. For listings, in many areas appraisers have to drive around looking for real estate listing signs. I remember the days of going to the county recorders office for info. Now, the recorded deeds, and other information, are online.
I have been waiting for decades to see a commercial AVM. Why not? Lack of Data. Costar has been unwilling to allow the use of its data. Warehouses would be good. Apartments could work in non-rent controlled areas.
Should The Agent Include These Areas In Square Footage?
Excerpt: The most thrown around metric in real estate has to do with square footage and price per square foot. People ask me all of the time what homes in this or that neighborhood are selling for per square foot.
Why do they do this? Because they want to take the price per square foot and then multiply it by the square footage of their home to find out what it is worth. Sounds reasonable right? Wrong….
(An example I see a lot): A heated and cooled finished room that is attached to the main house but you get to by going outside of the main house should not be included in the main GLA.
To read more, click here
My comment: written for real estate agents, but many appraisers, including myself, regularly get asked “what is in the living area” by agents. I do. This article focuses on ANSI and may help you explain it to them. There are links to his other blog posts on this, and related, topics.
A Timeline of the Most Popular Websites 1996 to 2019 Video
Just For Fun!!
Excerpt: A self-described data geek who enjoys making visualizations as a hobby, has created a fascinating timeline video that shows the most popular websites between the years of 1996 and 2019 in chronological monthly order.
Unsurprisingly, AOL had the most visitors in the early years of the web. Yahoo overtook AOL in 2001. Google took the helm of number one in 2006 where, after a bit of jockeying, it remains today.
To read more, click here
My comment: Remember webcrawler, netscape, compserve and altavista?
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Just for Fun!!
Excerpt: In every city, town, or countryside exists a piece of infrastructure that may now be defunct, but is unforgettable. These roads, bridges, railways, and other commodities were once considered the future, now they remain as historical artifacts and an ode to past memories.
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My comment: the second one down is about 20 miles from me. We have some of them from World War II, when everyone thought the Japanese were going to attack the west coast. You may be surprised where they are located!!
Scary appraiser movies, haunted houses, superstition
There were lots of great appraiser-related posts yesterday for Halloween. These are my faves. Plus my comments, of course ;>
5 Scary Movies That Describe An Appraiser’s Job
Excerpt: 1) Texas Chainsaw Massacre- While not as bloody as the Texas Chainsaw Massacre the massacre of DIY home improvements is still a very real thing. Some of us just don’t have home improvement skills and we need to realize it unless we’re okay with devaluing our homes.
To read more, click here
Superstition in Real Estate
Excerpt: Would you buy a home if the street address was 666? How about 13? Which is better—an address with 4’s or 8’s? While many people don’t consider themselves superstitious, 10% of Americans suffer from “triskaidekaphobia,” or fear of the number 13. Even more dramatic, the Stress Management Center and Phobia Institute of North Carolina claims that the US economy loses between $800 and $900 million every Friday the 13th due to reduced activity caused by “paraskevidekatriaphobia,” a tongue-twisting word for fear of Friday the 13th.
Very Interesting! To read more, click here
My comment: I have seen owners get an addresses changed. One was very recently changed, after the home was purchased, and I had to get a plat map to locate the comp!
Nearly 60 Percent of People Who Have Lived in a Haunted House Said They Found Out After Moving In
Excerpt: Forty-three percent of respondents may have had a ghost as a roommate
According to the survey, 58 percent of respondents said they have never lived in a haunted home, 23 percent of respondents said they have lived in one, while 20 percent think they may have lived in a haunted home. Of those who felt certain that they lived in a haunted house, 58 percent had no idea it was haunted before moving in and 37 percent knew it was and decided to go for it anyway. Five percent said maybe.
Strange noises and shadows are the most common spooky happenings
So what made them think it was haunted? Sixty-five percent of those surveyed said strange noises in the house made them think it was haunted. Fifty-two percent said strange shadows in the house, followed by 48 percent who said items moved on their own, 47 percent said certain rooms felt haunted, 46 percent said they would feel touched, and 44 percent said their home had hot and cold spots.
To read more, click here
Selling a Haunted House? Here’s What You Need to Know
Excerpt: Your dream home may be haunted, and in most states, sellers don’t have to say boo about it.
Ahead of Halloween, Zillow scared up a state-by-state analysis and found only four deal with paranormal activity in their real estate disclosure laws: New York, New Jersey, Massachusetts and Minnesota.
In New York state, courts will rescind a home sale if the seller creates and perpetuates a reputation that the house is haunted and then takes unfair advantage of a buyer’s ignorance of the home’s ghostly reputation. For example, if you invite reality television ghost hunters to your home, then later sell your poltergeist palace to an unwitting buyer who prefers sitcoms, a court could make that sale vanish.
To read more, click here
11 Haunted Hotels Where You Can Rest in Peace
Even if some of your fellow guests can’t.
Excerpt: here there’s a historic hotel, there’s also often a ghost or two. You can find these spirits most anywhere, mingling with guests in swanky spots frequented by Hollywood stars or roaming the cozy corridors of bed and breakfasts. From a quaint inn in the Scottish Highlands to a Colorado hotel so haunted it inspired Stephen King to write The Shining, here are 11 spectacularly spooky places to spend a night—if you dare.
My comment: I recently had lunch with a local appraiser. We somehow started talking about what is beyond what you can see. We had never talked about this before, for unknown reasons. He sometimes stays at a Bed and Breakfast in an old historic home when he travels. He said once he woke up and there was a woman standing at the foot of his bed. He is definitely not a person who would have “imagined” this. He spoke with the owner, who said the woman had been seen before.
To read more, click here
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Mortgage applications increased 0.6 percent from one week earlier,
Mortgage applications increased 0.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 25, 2019.
The Market Composite Index, a measure of mortgage loan application volume, increased 0.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 0.3 percent compared with the previous week. The Refinance Index decreased 1 percent from the previous week and was 134 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 10 percent higher than the same week one year ago.
“The 10-year Treasury rate rose slightly last week, as markets expected more progress toward a trade deal between the U.S. and China. Mortgage rates increased for the second straight week as a result, with the 30-year fixed rate climbing to 4.05 percent – the highest level since the end of July,” said Joel Kan, Associate Vice President of Economic and Industry Forecasting. “Mortgage applications were mostly unchanged, with purchase activity rising 2 percent and refinances decreasing less than 1 percent. Purchase applications continued to run at a stronger pace than last year, finishing a robust 10 percent higher than a year ago. Considering how much lower rates are compared to the end of 2018, purchase applications should continue showing solid year-over-year gains.”
The refinance share of mortgage activity decreased to 58.0 percent of total applications from 58.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.2 percent of total applications.
The FHA share of total applications decreased to 12.0 percent from 12.1 percent the week prior. The VA share of total applications decreased to 11.8 percent from 13.5 percent the week prior. The USDA share of total applications increased to 0.6 percent from 0.5 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 4.05 percent from 4.02 percent, with points decreasing to 0.37 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) increased to 4.01 percent from 3.96 percent, with points remaining unchanged at 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.83
percent from 3.79 percent, with points increasing to 0.28 from 0.26 (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 increased to 3.40 percent from 3.39 percent, with points increasing to 0.36 from 0.35 (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 3.43 percent from 3.29 percent, with points decreasing to 0.23 from 0.35 (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
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