Gentrification, neighborhood boundaries, and bias

By Ryan Lundquist 

Excerpts: Photo used with permission (thanks, Vicky).

Sometimes, crossing the street can make all the difference for value. In short, if we don’t understand where a neighborhood starts and ends, we might choose the wrong comps.

Q&A #3 How do we know neighborhood boundaries?

Okay, this is a big question, and it could easily be a dissertation. For starters, let’s consider what Fannie Mae says about neighborhoods:

Fannie Mae: “The appraiser should provide an outline of the neighborhood boundaries, which should be clearly delineated using ‘North,’ ‘South’, ‘East,’ and ‘West’. These boundaries may include but are not limited to streets, legally recognized neighborhood boundaries, waterways, or other natural boundaries that define the separation of one neighborhood from another. Appraisers should not reference a map or other addendum as the only example of the neighborhood boundaries.”

Other thoughts (mine): I think sometimes we focus only on major streets, but let’s also consider school boundaries and even how neighborhood associations or city websites define areas. But also, where would residents themselves draw the lines? And where would buyers be hunting for a home before shopping somewhere else? All these things could be clues.

To read more and see lots of maps and graphs, click here

My comments: Excellent analysis of specific neighborhood boundaries with maps and graphs, of course. Worth reading. The Jan. and Feb issues of the monthly Appraisal Today has this article: Does my neighborhood really need to be analyzed? Parts I II By Tim Andersen, MAI. The best neighborhood explanations I have ever read!!

Appraisal Business Tips 

Humor for Appraisers

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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, ANSI, bias, smells, mortgage origination stats, etc.



$6.5M Massachusetts Mansion Was Inspired By a Rare Luxury Car

Excerpts: Few homeowners have based their home’s design on a luxury car. But the owners of a distinctive residence in Swampscott, MA, created their $6.5 million waterfront home to replicate the sleek curves of the 1948 Delahaye 135M—a rare French automobile.

“There really is no other property like this,” says the listing broker, Matt Dolan of Sagan Harborside Sotheby’s International Realty. “It’s like an art deco Batmobile with swoopy fenders. That’s the spirit that comes to the house. In keeping with that, there are no straight walls in the house.”

Located about a half-hour north of Boston, at the end of a private, gated lane, this five-bedroom beachfront home was built in 1995 on a 1.43-acre lot. “When you think of a Massachusetts house, you tend to think of a New England-style Colonial,” says Dolan.

This means that this residence with what the agent calls “architecturally crisp lines” is a standout in more ways than one. Dolan tells us he’s fielded interest from overseas and that the home’s modern look has made it popular with potential buyers from the West Coast. It also has a minor claim to fame.

To read more and see all the photos, click here

My comment: Check out the view!


Regulators slap mortgage LOs with fines for skipping class

Excerpt: More than 400 mortgage loan originators will pay penalties after a multi-state investigation alleged they falsely claimed they completed an annual continuing education requirement.

LOs in 42 states who settled with state regulators will pay on average about $2,700 each — $1,000 for each state they are licensed in — for skipping the annual eight-hour course. They must also surrender their licenses for three months and take additional educational programs.

The 26-state investigation, which the California Department of Financial Protection and Innovation led, picked up on the discrepancies using a digital tool to check fulfillment of NMLS requirements. The effort found loan officers failed to fulfill a continuing education requirement, which varies by state, meant to enhance consumer protection and reduce fraud.

The LOs implicated in the investigation all paid for educational programs from Carlsbad, California-based firm Real Estate Educational Services (REES), regulators said. The firm, owned by Danny Yen, was licensed to provide Nationwide Multi-State Licensing System education, but instead orchestrated two education schemes.

To read more, click here

My comment: I’m not surprised. They have not been licensed as long as appraisers. I remember teaching CE classes soon after appraiser licensing started. I learned to watch out for students who take a “bathroom break” and are chatting in the hallway for long periods of time. In later years, they would be trying to run their businesses using their cell phones outside.


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In the February 1 issue of Appraisal Today
Lots of Information on ANSI Z765-2021

  • Sloped ceilings, stairs, and below-grade – practical tips and good illustrations
  • Why did Fannie select ANSI Z765? Which appraisers are using ANSI now? Not everyone who uses ANSI knows what the Standards really require. The 7 changes for 2021.
  • Fannie vs. ANSI, similar with some differences. Fannie says more information is coming by April 1. Filling out the URAR grid can be tricky and may be confusing to AMCs, reviewers, borrowers, etc.
  • Who developed ANSI Z765-2021 and Who approved the 2021 changes? Will appraisers apply to be on the next update’s committee? Only 5 applied this time for the 5 appraiser positions.
  • Does my neighborhood really need to be analyzed? Part II By Tim Andersen, MAI The best analysis of this I have ever read.

To read the articles, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.If these articles helped you understand how to use ANSI it is worth the subscription price!

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New Fannie Report: Appraising the Appraisal 

A closer look at divergent appraisal values for Black and white borrowers refinancing their home

Email sent by Fannie 1-20-22:

As part of our ongoing commitment to helping all homeowners receive a fair and impartial appraisal, we published a research report looking at appraisal values of homes owned by Black and white borrowers in refinance transactions.

Key findings in our analysis of 1.8 million appraisals:

• Black borrowers refinancing their home on average received a slightly lower appraisal value relative to automated valuation models.

• Homes owned by white borrowers were more frequently overvalued than homes owned by Black borrowers.

• Six states, including Georgia, Louisiana, South Carolina, North Carolina, Mississippi, and Alabama, accounted for nearly 50 percent of the overvalued homes of white owners in majority-Black neighborhoods.

There are many possible reasons why an appraisal would be either overvalued or undervalued. Fannie Mae and its industry partners should continue to take concrete actions to minimize the chances that the race of a borrower or homeowner is one of those reasons.

Accurate and unbiased appraisals can help remedy the legacy of racial inequities in the housing market. Modernizing the appraisal process, as well as fostering diversity in the appraisal workforce, are two ways the housing industry can help minimize the chance of racial bias in home valuation.

To read the Fannie report, click here

My comment: No one but Fannie knows how their AVM does, or doesn’t, work well!


What’s that Smell Worth? Insights from a Seasoned Appraiser

By: Steven W. Vehmeier

Excerpt: How do appraisers address these odor issues?

There is not a lot of data out there on which houses sold with dander, feces, and urine issues and which did not. I am also not aware of a scaling standard in existence that might facilitate placing a number on the degree of negative impact of such odors. Even if one could poll buyers, sellers, brokers, and appraisers for their opinions, how do you quantify the degree of impact without each of those individuals visiting the property in question and sniffing around?

In one of my pre-license class field trips to inspect a house that was on the market, it was obvious to all 28 students why the house had been on the market so long. An intense dog odor permeated the house. When asked about the cost to remediate, there were a couple of wild guesses. When asked how much they thought the price would have to be discounted to achieve a sale, the answers likewise were all over the place.

To read more, click here

My comments: We’ve all encountered this. My “bottom line” is when I can only stay in the house for a few minutes. I rush in and out very quickly, a few times (or more). Of course, I have seen (and smelled) a lot of pet damage, including from a few of my apartment tenants. The cost to cure can be low or very high.


ANSI Z765-2021 Resources

Every week I write about new classes, Webinars, videos and written material on this web page. I also remove old information, such as a class that has changed the dates it is offered.

Don’t wait to sign up for these classes!! The number of attendees per class is limited.

Appraiser elearning has a livestream 4-hour CE classes available in February, March, and April. Class name: Measuring with ANSI & the 2021 ANSI Update.

I took the class yesterday, January 27, and highly recommend it. Hamp Thoma (aka “Mr. ANSI”), the course developer, is an excellent instructor. I liked his North Carolina accent! He has been writing and teaching about ANSI for almost 20 years. The Zoom class went smoothly with some interaction from the 123 attendees. The moderator did a good job.

Hamp’s “mission”, for over 20 years, has been getting home measurement standards for appraisers and real estate agents. He wants to get accurate and reproducible home square footage for appraisers, real estate agents, and MLS.


McKissock is offering a live stream 4-hour CE class. I am taking it on February 6.

Measuring 1-4 Unit Residential Properties-with ANSI Z765 Standard Livestream.

Note: February is sold out. March and April sessions are available.

Per the instructor: About 3 hours is on ANSI. There is an introductory section and a section on measurement “best practices,” which can be applied to the ANSI part of the course. There is also a section on measuring 2-4 unit properties, which ANSI does not cover.


For info on how to signup for the classes above, which can be tricky, use my website link above.

I will be reviewing these classes in the March issue of Appraisal Today.

Mckissock and Appraiser elearning are waiting for state approvals for their online classes. Hopefully, they will be approved by April 1!


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 decreased 7.1 percent from one week earlier

WASHINGTON, D.C. (January 26, 2022) – r, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 21, 2022.

The Market Composite Index, a measure of mortgage loan application volume, decreased 7.1 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 13 percent from the previous week and was 53 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 increased 5 percent compared with the previous week and was 11 percent lower than the same week one year ago.

“All mortgage rates in MBA’s survey continued to climb, with the 30-year fixed rate rising for the fifth consecutive week to its highest level since March 2020. The 30-year fixed rate is now 77 basis points higher than it was a year ago,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Unsurprisingly, borrower demand for refinances subsided, with applications falling for the fourth straight week. After almost two years of lower rates, there are not many borrowers left who have an incentive to refinance. Of those who are still in the market for a refinance, these higher rates are proving much less attractive to them.”   

Added Kan, “The decline in purchase activity was led by a 5 percent drop in government applications, compared to a modest less than one percent decline in conventional applications. The relative weakness in government purchase activity continues to contribute to higher loan sizes. The average purchase loan size was $433,500, eclipsing the previous record of $418,500 set two weeks ago.”  

The refinance share of mortgage activity decreased to 55.8 percent of total applications from 60.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 4.4 percent of total applications.

The FHA share of total applications decreased to 8.6 percent from 9.3 percent the week prior. The VA share of total applications decreased to 9.9 percent from 10.0 percent the week prior. The USDA share of total applications increased to 0.5 percent from 0.4 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 3.72 percent from 3.64 percent, with points decreasing to 0.43 from 0.45 (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 $647,200) increased to 3.56 percent from 3.54 percent, with points decreasing to 0.38 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 30-year fixed-rate mortgages backed by the FHA increased to 3.69 percent from 3.64 percent, with points increasing to 0.61 from 0.44 (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 3.00 percent from 2.95 percent, with points decreasing to 0.39 from 0.43 (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 3.18 percent from 3.04 percent, with points increasing to 0.33 from 0.24 (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

1826 Clement Ave. Suite 203 Alameda, CA 94501

Phone 510-865-8041


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