How to Tell If You Live in the Suburbs

Excerpts: The U.S. hasn’t had a formal definition for what constitutes a suburb. A new data analysis comes closer to defining America’s most popular neighborhood type.

The United States is a land of suburbs, with just one problem: No one’s quite clear what a “suburb” is.

It’s a question of semantics with real-world implications, as government programs, political campaigns and developers try to spend money in the “suburbs,” where a majority of Americans say they live despite the category having no formal definition.

For some people, it’s obvious: A suburb is a smaller city on the periphery of a larger city. Or it’s a sprawling neighborhood filled with vast swathes of single-family homes. Still other more dated conceptions of suburbia in the popular mind involve the people who live there: allegedly white, middle class and socially homogenous.

Now a new team of researchers believe they’ve cracked the code…

To read more, click here

My comments: Of course, if you do residential lender appraisals this is a Very Big Issue due to lender “requirements” such as no rural properties. Lots and lots of online discussion about this for a long time. Post this topic on your favorite Internet chat site or email list… and wait for the wide variety of opinions!!

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My Favorite Definitions

(This has been floating around for many years…)

Rural  Suburban  Urban

  • If you stand naked on the front porch and the neighbors can’t see you… it’s rural.
  • If you stand naked on the front porch and the neighbors call the cops on you… it’s suburban.
  • If you stand naked on the front porch and the neighbors ignore you… it’s urban.

There are other variations, of course, that are not suitable for this newsletter ;>

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Does USPAP Cause Cognitive Dissonance?

Excerpt: How could this possibly be a USPAP issue?

USPAP, (Uniform Standards of Professional Appraisal Practice) may cause psychological dissonance in appraisers – because the review standards and practice standards have different requirements!

For the appraiser, Standard 1-2(h) requires results to comply with the Scope of Work Rule. The test of acceptability is:

Do what intended users expect; and

Do what appraiser peers would do.

Simple. No Dissonance.

So, what about appraisal review methods?…

To read more, click here

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15 Fascinating Repurposed Places

Take a Quick Break From Grinding Out Appraisals!!

Excerpts: One person’s ruins are another’s dream construction project.

FOTO Above: New York City High Line Park – Former Elevated Rail structure

Excerpt: The world is filled with hollowed-out buildings longing for care, forlorn parks whose better days are distant memories, and subterranean haunts that have been abandoned. Many of these forgotten relics wither away or are demolished. Others are saved by people who recognize their hidden beauty and potential.

While restoration is always an option, others are transformed. These 15 places have been repaired and repurposed far beyond their original designs, allowing them to live wondrous second lives that can be experienced in person, whether that means rocking out in an 18th-century cathedral, kayaking through a subterranean reservoir, or exploring an abandoned film set. Rescued from neglect, they’re now shining examples of human ingenuity.

Interesting comments and very good fotos. To read more, click here

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Missed Housing Payments Continue Piling Up In July

Excerpt:

  • 32 percent of Americans did not make a full on-time housing payment in July, up slightly from 30 percent in June.
  • Missed payments continue to concentrate among renters, young and low-income households, and residents of dense urban areas.
  • Compared to last month more Americans are concerned about evictions and foreclosures, even as federal and certain local displacement protections are extended.
  • Coronavirus continues to simultaneously encourage and discourage moving. Many are likely to move because of declining affordability, while others are staying put because of the health risks associated with moving during a pandemic.
  • Renters in large multifamily apartment buildings show higher payment rates than those living in smaller buildings and single-family homes.

To read more, click here

My comments: If you ever appraise 2-4 units, keep close track of local rents.

I have owned residential rental property for 40 years. There have been ups and downs in vacancy and rents. Our market rents are very high here. I am worried about the immediate future if the $600 per month unemployment benefits are not extended.

The owner/manager of my office building also owns 600 local apartments. Evictions are regulated. I check in with him every week. Fortunately, he has many rent subsidized apartments, where the tenants are having difficulty paying even their small share of the rent. He gets the remaining rent from the local housing agency. Non-subsidized tenants are paying okay… for now…How much money do you make per hour on your appraisals, after expenses

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How much money do you make per hour on your appraisals, after expenses

Excerpts:

We are paid for our opinions. We collect and analyze data and make decisions on value. Finding out how much money you are making after expenses is the first

critical step in the success of your business.

How this analysis can help your business

Appraisers are analysts. We get the data, analyze it, and make conclusions.

Unfortunately, we don’t do much critical analysis of our business’ profitability. Why not apply the same skills to your business?

1. Which types of appraisals are your most profitable appraisals and which are the money losers.

2. Which are your most profitable type of clients, and which are the worst?

3. Are there any costs you can reduce?

Do you know how much are you making per hour, after expenses?

How can you change your business to increase profit? Which geographic areas, types of appraisals, and clients are your most profitable. I have word processing and spreadsheet templates available online so you set them up the way that fits your business.

In the March 2020 issue

The article is written by Ann O’Rourke, MBA. Using her business education and 35 years of fee appraisal experience, she can help you increase your appraisal business profits!!

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More Covid Data Rolls in, Are Refis Here to Stay?

Excepts: Black Knight has again taken a look at the number of Americans who could benefit significantly from refinancing their first mortgages, but the facts are shifting almost faster than they can report them. In its current Mortgage Monitor, the company reports that 90 percent of homeowners who have sufficient equity in their homes and the qualifying credit to refinance could improve their current interest rate…

Still, there is a pandemic out there and its impact is being felt. Last month’s Monitor reported that the population of qualified refinance candidates had been reduced by about 4 percent due to a new delinquency. Black Knight’s weekly forbearance report for June 30 showed the first increase in those plans after three weeks of decrease and that 8.8 percent of active mortgages are in a plan. Further, the percentage of homeowners in plans who have continued to make their payments has fallen each month – from 46 percent in April to 30 percent in May. As of June 23, only 22 percent of June payments had come in.

To see lots of graphs and analysis: To read more, click here

My comments: Forbearance (adding unpaid monthly payments to the mortgage balance) will help for awhile, but not all loans can get forbearance. FYI, some people in forbearance have continued to make monthly payments as forbearance was a back up if there was job loss in the future.

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Another Fannie Update, dated July 9, 2020

We have three topics to inform you about in today’s update:

  • The extension of COVD-19 appraisal flexibilities to 8/31/20,
  • New UAD FAQs, and
  • The AQB’s Real Estate Appraiser survey

UAD and Forms Redesign FAQs

Fannie Mae and Freddie Mac (the GSEs) are collaborating on the UAD and Forms Redesign initiative to update the Uniform Appraisal Dataset (UAD). As the GSEs continue to engage the industry about proposed changes, some common questions have arisen. To address these questions and provide more clarity around the initiative, the GSEs have posted new FAQs.

My comments on the FAQs: Looks like Fannie is working on this now. Worth reading the FAQs This came in as I was finishing this newsletter yesterday and did not have time to read them closely. But, in the 3 page document, the questions are well written and detailed, answering many appraiser questions. Worth reading. I already knew about many of the possible changes from other sources, and had written about them, but did not have any “official” documents.

Sample FAQ questions:

10. Will the Sales Comparison Appraisal Approach (SCA) grid change?

Yes. The new SCA grid, like the new appraisal report, will be data driven. The support for adjustments will reside in the grid, allowing the reader of the report to understand the adjustments without searching within the text.

5. Will the appraisal forms be redesigned?

Yes, the appraisal forms listed below will be retired and replaced with a data-driven, flexible, dynamic structure for appraisal reporting in the form of a redesigned URAR. This report will have a similar look and feel to the redesigned Uniform Residential Loan Application (URLA) and the Closing Disclosure (CD).

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Real Estate Appraiser Survey – open through July 31

The Appraisal Foundation has contacted Fannie Mae to solicit additional participation in the 2020 National Real Estate Appraiser Job Analysis Study conducted by the Foundation’s Appraiser Qualifications Board (AQB). This online survey helps the AQB get a full picture of the profession today for use in developing future exams that reflect current appraisal practice.

This survey was previously closed but has been reopened until Friday, July 31, 2020. If you have an active appraiser license and have not already completed the survey, consider taking this survey (especially if you hold a Licensed Residential Real Property Appraisal credential). The AQB has stated that individual responses are confidential and will be included with the responses from other professional appraisers.

My comments on the survey: I tried to fill it out earlier, when the Appraisal Foundation sent it out, but the many of the questions were very basic and did not seem relevant to me, as an experienced appraiser. I was not the only appraiser with this opinion. I quit after 4-5 pages of questions. Per the instructions, it takes 30-60 minutes to complete – a very long time. The Fannie Update invitation includes: “especially if you hold a Licensed Residential Real Property Appraisal credential“. I don’t remember if that was in the initial survey request from the Appraisal Foundation. FYI, I took classes in graduate school in survey design and testing, so I know how to do them, plus how to select the right people to complete them. /But, I may be overly critical. I sent my opinion to the survey people.

Try it out. It may work for you.

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Read the full 3-page updated Fannie letter, click here.

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HDPNH3 Observation elevator at mountain of Zhangjiajie national park, China

Bailong Elevator – Zhangjiajie, China

WOW!! Take a few minutes to check it out!!!

Excerpts: The world’s tallest outdoor lift stretches along the stone pillars that inspired the floating mountains in the movie “Avatar.”

The Zhangjiajie National Forest Park in the Hunan Province of China is famous for the spectacular sandstone pillars that rise up from the forest floor, the tallest reaching heights of more than 3,000 feet. Think of the floating Hallelujah Mountains in Avatar, and you’ll have a fairly good mental image.

Among these pillars rises another lofty structure, albeit one of steel and glass: the Bailong Elevator (meaning the Hundred Dragons Elevator), officially recognized as the tallest outdoor lift in the world.

To read and see more, click here

My comment: Can’t wait for a new Avatar movie. One of my favorite “syfy” movies.

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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.

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Mortgage applications increased 2.2 percent from one week earlier,

WASHINGTON, D.C. (July 8, 2020) – Mortgage applications increased 2.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 3, 2020. This week’s results include an adjustment for the Fourth of July holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 8 percent compared with the previous week. The Refinance Index increased 0.4 percent from the previous week and was 111 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 33 percent higher than the same week one year ago.

“Mortgage rates declined to another record low as renewed fears of a coronavirus resurgence offset the impacts from a week of mostly positive economic data, such as June factory orders and payroll employment. The 30-year fixed rate slipped to 3.26 percent – down 53 basis points since late March. Borrowers acted in response to these lower rates, after accounting for the July 4th holiday,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Purchase applications continued their recovery, increasing 5 percent to the highest level in almost a month and 33 percent from a year ago. The average purchase loan size increased to $365,700 – also another high – as borrowers contend with limited supply and higher home prices.”

Added Kan, “Refinance applications increased slightly, driven by a 2 percent rise in conventional refinances. Overall refinance activity was up 111 percent from last year.”

The refinance share of mortgage activity decreased to 60.1 percent of total applications from 61.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3.4 percent of total applications.

The FHA share of total applications decreased to 10.9 percent from 11.7 percent the week prior. The VA share of total applications decreased to 10.4 percent from 10.8 percent the week prior. The USDA share of total applications increased to 0.7 percent from 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.26 percent from 3.29 percent, with points decreasing to 0.35 from 0.36 (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 $510,400) decreased to 3.52 percent from 3.59 percent, with points increasing to 0.36 from 0.31 (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 3.31 percent from 3.43 percent, with points decreasing to 0.24 from 0.36 (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 2.77 percent from 2.81 percent, with points decreasing to 0.32 from 0.40 (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 decreased to 2.98 percent from 3.04 percent, with points increasing to 0.10 from -0.03 (including the origination fee) for 80 percent LTV loans. The effective rate decreased 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.

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NOTE: NEW POSTAL ADDRESS

Ann O’Rourke, MAI, SRA, MBA

Appraiser and Publisher Appraisal Today

1826 Clement Ave. Suite 203 Alameda, CA 94501

Phone 510-865-8041

Email  ann@appraisaltoday.com 

www.appraisaltoday.com

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