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NOTE: Please scroll down to read the other sections of this long blog post on decline in number of appraisers, measuring changes for 1 foot, Bracketing, mortgage origination stats, etc.
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Change your templates!!
This year, I am getting ready early. No more appraisals and checks dated 1/2/19!!! I will change the dates to /20 now. Even if I have a few appraisals with 2019 effective dates, hopefully I will notice the /20 ;>
The Number of CA appraisers drops from 20,120 to 9,987. Renewal fees up 76% for 2020.
Excerpt: It’s time to assess and reflect on the numbers as the decade ends. It’s noteworthy that the total population of Bureau of Real Estate Appraisers (BREA) licensees has now fallen below 10,000 for the first time since the Bureau began keeping records. The numbers reflect some interesting trends.
Licensee population counts vary daily as licenses are granted and others expire, so this data is a recent snapshot in time. Also, approximately 7% of licensees are trainees, 8% report
out-of-state addresses, and some percent are not actively practicing. Therefore, it’s likely that the number of active working appraisers in California is somewhere around 8,000.
More surprising are the numbers that show how the population of appraisers in California is aging and how few young people are entering the profession. Nearly 70% of licensees are over 50, almost 40% are over 60, and less than 12% are under 40. When trainees are removed from the count, there are more licensees from ages 80–89 (109) than there are from ages 20–29 (88).
My comments: Of course, as we all know, first FHA required certified appraisers, then AMCs did, even though some of their lender clients did not. Who is going to keep trainees for the years required to become certified plus have a few years experience after being certified? Plus, inspect with them. Very few appraisers will do this. I would have not hired trainees in my business if this was required.
Lowering licensing requirements won’t help if there is no one to train appraisers.
CA is on a 4 year full CE cycle. Every 2 years USPAP is required. Every 4 years all CE is required. The annual renewal fee for certified is $462.5 starting 1/1/20. In 2019 it was $262.50, an increase of 76%. In 2006 it was $150. In 1994 it was $202.50.
What will this mean? As more appraisers retire or quit and give up their licenses, there will be more work for the appraisers that are left. Many baby boomers, including myself, are cutting back on appraisal work, making it harder to justify the fixed costs, including licensing and CE.
To read more and see tables and graphs, click here
My comment: CA is useful for comparison as it has a large number of appraisers in a wide geographic area.
US finally giving boot to official foot measurement
The U.S. is 28.3 ft. wider
Excerpt: Change is afoot for the official measuring stick used to size up big places in America.
The reason? There are actually two different definitions of the 12-inch measurement known as a foot.
Some land surveyors use what’s known as the U.S. survey foot. Others use the definition that’s more accepted by the broader world: the international foot.
The difference between them is so tiny that you can’t see it with the naked eye on a 12-inch ruler. But over big distances, it matters. So, to reduce the chance for errors and confusion, the federal government has announced it’s finally giving the boot to the survey foot.
The international foot is the smaller one — adding about an eighth of an inch of difference when measuring a mile.
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In an Appraisal, Ranking Beats Bracketing All Over the Place
By Tim Andersen, MAI
Excerpt: There has been a lot written in the real estate appraisal press and blogosphere of late about an appraiser’s need to support his/her adjustments. Such admonitions can be found in peer-reviewed journals, as well as in other publications more accessible to the practicing appraiser.
The premise of these admonitions is that market support exists (somewhere) for these adjustments. Since the premise assumes such support exists, it presumes the appraiser merely must go out and find it. Generally, this is possible assuming the appraiser has the time, resources, and initiative to chase down the necessary support.
There, however, is an irony in this line of reasoning. That irony is USPAP, the “bedrock” of all things pertaining to real estate appraisal, does not even mention the words “adjustment” or “adjustments” in Standards One or Two (but it clearly requires support for any and all adjustments and conclusions).
My comment: Our state regulator wants to see support for all adjustments. I quit making dollar adjustments on form appraisals four years ago. Non-lender work, of course. Works out great!! For a while, I used + and – on the grid, but did not need it.
Climate change could end mortgages as we know them
Excerpt: Climate change could punch a hole through the financial system by making 30-year home mortgages — the lifeblood of the American housing market — effectively unobtainable in entire regions across parts of the U.S.
That’s what the future could look like without policy to address climate change, according to the latest research from the Federal Reserve Bank of San Francisco. The bank is considering these and other risks in early November 2019 in an unprecedented conference on the economics of climate change.
My comment: Here in CA many homeowners are unable to find fire insurance. Also, rates are skyrocketing. What scares me the most though, is the high temperatures at the north and south poles, resulting in ice melting and sea level rise. I live on an island in San Francisco Bay, about 5 feet above sea level.
America After Climate Change, Mapped
Excerpt: In 100 years, what will a United States transformed by climate change look like? At this point, you don’t have to use much imagination to predict what’s coming: Temperatures will continue to climb; sea levels will continue to rise. And, by the 2060s, the U.S. Census Bureau estimates that global migration patterns will bring 100 million new people into the country, who will settle from coast to coast.
Almost everything else about the climate of tomorrow and the nation’s ability to survive it is less inevitable, however, says Billy Fleming, the director of the University of Pennsylvania’s McHarg Center for Urbanism and Ecology. “There are certain general things we’re certain about, but the shape and content of the future is not one of them,” he said. “We get the future we build for ourselves.”
To see more, including the great infographics, click here
Mortgage applications decreased 5.3 percent from one week earlier
WASHINGTON, D.C. (December 26, 2019) – Mortgage applications decreased 5.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 20, 2019.
The Market Composite Index, a measure of mortgage loan application volume, decreased 5.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared with the previous week. The Refinance Index decreased 5 percent from the previous week and was 128 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index decreased 7 percent compared with the previous week and was 5 percent higher than the same week one year ago.
“The 10-Year Treasury yield increased last week amid signs of stronger homebuilding activity and solid consumer spending, leading to a rise in conventional conforming and jumbo 30-year mortgage rates to just under 4 percent. With this increase, conventional refinance application volume fell 11 percent,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Refinance applications for government loans did increase, even though rates on FHA loans picked up. The change in the mix of business has kept the average refinance loan size smaller than we had seen earlier this year.”
Added Fratantoni, “We are in the slowest time of the year for the purchase market. Purchase application activity declined after the seasonal adjustment, but still remains about 5 percent ahead of last year’s pace. The increase in construction activity will bolster housing inventories, which should be a positive for purchase volumes going into 2020.”
The refinance share of mortgage activity increased to 62.6 percent of total applications from 62.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 4.1 percent of total applications.
The FHA share of total applications increased to 14.5 percent from 13.7 percent the week prior. The VA share of total applications increased to 15.2 percent from 12.9 percent the week prior. The USDA share of total applications remained unchanged at 0.5 percent from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased to 3.99 percent from 3.98 percent, with points remaining unchanged at 0.33 (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 3.97 percent from 3.96 percent, with points decreasing to 0.25 from 0.26
(including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.87 percent from 3.79 percent, with points decreasing to 0.33 from 0.36 (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 3.39 percent from 3.40 percent, with points remaining unchanged at 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.
The average contract interest rate for 5/1 ARMs increased to 3.38 percent from 3.28 percent, with points decreasing to 0.21 from 0.23 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
Please Note: MBA Offices will be closed Tuesday, December 24, 2019 and will reopen on Thursday, January 2, 2020. Due to the holiday, the next release, for the results for the weeks ending December 27, 2019 and January 3, 2020, will be released on January 8, 2020.