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Appraiser Retirement?
By An Anonymous Appraiser
Excerpt: …retired 2 months ago, and I am SO GLAD I did. I’ve had enough. I decided on an appraisal career because I found real estate, and especially the valuation of homes to be extremely fascinating and challenging, and although I had heard that the appraisal profession was making changes back 30+ years ago, I “assumed” it was becoming a more upstanding, professional occupation, in the eyes of the lenders, politicians and general public, similar in stature to doctors, lawyers and accountants. In other words, they would would hold the appraiser’s opinion via “trust in the professionals opinion”.
What we got, was 30+ years of complaints from the lenders and politicians who blamed appraisers for all of the lenders and political wrong doings. And the public believed them! Why? Because appraisers NEVER got together as an organization to support other residential appraisers! Oh yes, there was the Appraisal Society and the Appraisal Institute, of which I became a candidate, but when I realized that they catered to commercial appraisers, and recently to their own needs, I decided there was no reason for me to join. Besides when licensing came along, the license was the main criteria for selecting the appraiser.
To read more plus many appraiser comments, click here
My comments: Many appraisers are getting older and retiring now for various reasons.
I am 78 years old and have been appraising for 45 years. I love appraising!! (I have not done any lender res appraisals since 2005.) I have friends near my age who are still appraising and like it. They work for direct lenders mostly and do little AMC work.
What is “retirement” for fee appraisers? One of the great reasons to be a fee appraiser is choosing when, where, what you appraise, and whom you work for. In the past, I worked long hours 7 days a week on properties in a wide geographic area. It has been many years since I worked that hard. Many of us just fade away gradually ;>
I recently spoke with two 55-year-old female appraisers. They had both invested in real estate and were retiring early. I have known appraisers over the years who did this. Why aren’t there more? Risk avoidance, I guess. I invested in a duplex in 1986 ($120,000 purchase price). I am living there now after selling my large home. My tenants pay mortgage, insurance, and taxes. I shoulda bought more when the prices were way down here!
I have written about appraiser retirement in my monthly newsletter many times over the years. Be sure you have “tail” insurance to cover any e&O claims after you retire. Mine is free from my E&O company. My most recent article is from May 2021, “Retirement: To Stay or Not to Stay. That is the question!!” Lots of issues to consider. Tip: don’t start taking Social Security until you are 70. I get $3,235 per month now, before the cost of living coming increases. The maximum is $3,985 per month.
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To read more of this long blog post with many topics, click Read More Below!!
NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, Bias and ASC, real estate market, mortgage origination stats, etc.
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Party Palace For Sale
Just for Fun!!
2189 Sunset Plaza Dr, Los Angeles, CA
Price: $11,000,000
Designed as a private nightclub and casino, this five-bedroom home is a party palace. Guests can indulge in the pool, theater, grotto with whirlpool, steam room, or sauna. The listing states this abode hovering over the Sunset Strip has been featured on TV and in magazines.
To see more photos, click here
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What’s The Leaven Causing Home Prices to Rise Today?
By Jamie Owen
Excerpts: Speaking of things rising, home prices, as well as the prices of most other things, are rising rapidly. Recently, some of my well-intentioned clients have asked if it is possible to appraise a home-based upon a “normal market.” Others have expressed concerns that we are headed for a housing crash, like in 2008.
Just as different types of leaven can be used to make bread rise, and even change the flavor of the bread, increasing home prices can result from different situations. Let’s talk about the difference between today’s market and the one during the years leading up to the bursting of the housing bubble in the Great Recession of 2008….
The price increases leading up to 2008 were not due to a shortage of supply. (See charts in blog post) That market was also not driven by historically low-interest rates. Granted, mortgage rates were not terrible. And they would fluctuate, which did create some demand. … Prior to 2008, those rates did not drop as they have within the past year and a half.
To read more and see fun animated gifs click here
My comments: Very interesting comparison of 2008 and today – significant price increases. Plus graphs and videos, as always, in Jamie’s blog posts. Plus an audio interview with Jonathan Miller.
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Retirement: To Stay or Not to Stay. That is the question!!
Retirement “triggers”
For many who retire, there is something that happens causing you to decide, such as.
– Hate your job and don’t think it will change.
– Spouse retires
– Health problems
– Influence of family and friends who have successfully retired
– Children graduate from college
– It’s the right time: finances are in good shape and emotionally ready for the changes that retirement will bring
Fixed costs of appraising
MLS, forms software, E&O insurance, auto expenses, state license, CE,
association dues, etc., can add up. I asked my E&O company (Liability Insurance Administrators) if my cost could be lowered as I am billing out much less. I got a reduced rate for a much lower volume of work.
Doing appraisals after you give up your state license
Giving up your license is usually the “trigger” for fully retiring from appraising.
I don’t recommend giving up your license unless you are sure you
will never want to appraise again, as it is an easy way to increase your
retirement income. In most states, you renew every two years and must decide then. Fortunately, in California, we are on a 4-year renewal cycle, so there is a
longer period before deciding. See if your state allows you to temporarily put your license “on hold”. Much better than giving it up.
You can appraise without a license in many states, including California,
but it is very difficult to get work. No lender work, and many other clients,
want to know if you are licensed. When licensing first started, I knew
appraisers who did not get licensed because they never worked for
lenders. They had to get one because their clients wanted it, particularly
attorneys.
Increase contributions to your SEP IRA, Solo 401k, or other retirement
plan to build up your savings
A SEP-IRA allows up to $57,000 in income or 25% of income, whichever
is less (generally – check with your tax advisor). The limits for a Solo 401k
is $19,500. I usually contribute the maximum SEP IRA allowed every year.
If you got one good idea about retirement from this article, it is worth the subscription price!!
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or $99 per year or $169 for two years
Subscribers get FREE: past 18+ months of past newsletters.
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Dodecagon House in Encino, CA, listed for $8.5 million
The unique home consists of two dodecagons, or 12-sided structures, connected by a glass pavilion. A third, separate guesthouse, also a dodecagon, was later added on the grounds.
There are 6,811 square feet of living space in the three rotundas, and all feature soaring, wood-paneled ceilings typical of the classic post-and-beam era.
At $1,247 per square foot, the Lewis Estate is priced substantially higher than the median listing price in Encino, which is $595 per square foot.
All these meticulously maintained retro features make the Lewis Estate a period paradise for production companies.
The home was featured on the TV series “Aquarius” in 2015, “Snowfall” in 2017, and the Beanie Feldstein breakout film “Booksmart” in 2019. It was unmistakably the set for Elle King‘s video “Shame” in 2018.
To read more and see lots of interesting photos, click here
My comment: I had never heard of a dodecadon house!! I had to google it. Dodecadon means 12 sides. or a 12-sided polygon. I would pass on the appraisal. Too far away from my city ;> 21 miles from LA close to a freeway, thus the Hollywood connections.
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Stephen Forrester Memorial Fund (1976-2021 – 45 years old)
Excerpts: The National Association of Appraisers (NAA) would like to celebrate the life of one of its members, Stephen Forrester, and raise funds to assist his family in their time of need. Stephen is husband to Rebecca and two daughters age 12 and 14 all from Somerville, Tennessee.
The family was enjoying a vacation in the Bahamas. 72-hours prior to their flight home, Stephen tested positive for COVID-19 and was immediately quarantined. He insisted that Rebecca and his daughters return home as scheduled to avoid infection themselves…
Rebecca and Stephen spoke daily and he insisted his health was improving each and every day. On, Wednesday, October 20th he did not respond to calls and/or text messages. Rebecca asked the hotel to check on him in his room; they reported that Stephen had sadly passed!
To read more, click here
To contribute on the gofundme page, click here
My comments: Very sad. He died way too young. I contributed on the gofundme page.
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Second ASC 2021 Roundtable: Building a More Equitable Appraisal System
Excerpt: On November 9, 2021, the Appraisal Subcommittee (ASC) will convene its second ASC 2021 Roundtable: Building a More Equitable Appraisal System, to build upon the success of the first roundtable and address historical and contemporary factors that have contributed to the inequities challenging the appraisal system today. Please join us for the second event of this groundbreaking series, which will bring together leaders in government, finance, real estate, non-profits, and communities impacted by the appraisal system.
Featured speakers include Congresswoman Maxine Waters, Chairwoman of the House Financial Services Committee; Melody Taylor, Executive Director, Task Force on Property Appraisal and Valuation Equity; Danny Wiley, Senior Director of Single-Family Valuation, Freddie Mac; Vivian Li, Internal Audit Director, Freddie Mac, and more.
November 9 from 1:30 p.m. to 4:00 p.m. ET (10:30 a.m. to 1:00 p.m. PT) and will include featured speakers, audience question and answer sessions, theme-based concurrent breakouts, and closing comments outlining next steps.
To read more, click here
Note: Register as a guest, which does not require a password, etc.
My comment: I attended the first virtual roundtable on September 22, 2021, two days after the Freddie report above was released. I was hoping it would not be another appraiser bashing. Fortunately, I was wrong! Definitely worth the time, but no recording was available. I made many pages of notes.
I wrote about it in the September 24, 2021 email newsletter Link to my newsletter. Scroll down the page to just above the Creepy Doll House photo to read what I wrote.
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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. I have been following this data since 1993. 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 7 AM to noon, Pacific time.
Mortgage applications decreased 3.3 percent from one week earlier
WASHINGTON, D.C. (November 3, 2021) – Mortgage applications decreased 3.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 29, 2021.
The Market Composite Index, a measure of mortgage loan application volume, decreased 3.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week and was 33 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 9 percent lower than the same week one year ago.
“Mortgage rates decreased for the first time since August, as concerns about supply-chain bottlenecks, waning consumer confidence, weaker economic growth, and rising inflation pushed Treasury yields lower. Most of the decline in rates came later in the week, which is likely why refinance applications declined to the lowest level since January 2020, and the overall share of activity fell to the lowest since July 2021,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Government refinance applications fell for the sixth straight week, as it becomes evident that an increasing number of borrowers have already refinanced.”
Added Kan, “Purchase activity continues to be held back by high prices and low for-sale inventory, but current applications levels still point to healthy housing demand. MBA is forecasting for a record $1.6 billion in purchase mortgage originations this year, and sustained demand leading to another record year in 2022.”
The refinance share of mortgage activity decreased to 61.9 percent of total applications from 62.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3.2 percent of total applications.
The FHA share of total applications decreased to 9.2 percent from 10.4 percent the week prior. The VA share of total applications decreased to 9.9 percent from 10.6 percent the week prior. The USDA share of total applications remained unchanged from 0.5 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.24 percent from 3.30 percent, with points remaining unchanged at 0.34 (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 $548,250) decreased to 3.29 percent from 3.34 percent, with points decreasing to 0.27 from 0.29 (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 3.29 percent from 3.31 percent, with points remaining unchanged at 0.38 (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 2.58 percent from 2.59 percent, with points decreasing to 0.29 from 0.33 (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 2.88 percent from 2.89 percent, with points decreasing to 0.11 from 0.13 (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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Ann O’Rourke, MAI, SRA, MBAAppraiser and Publisher Appraisal Today
1826 Clement Ave. Suite 203 Alameda, CA 94501
Phone 510-865-8041
Email ann@appraisaltoday.com
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