Sellers Chasing the ball down the road in real estate

By Ryan Lundquist

Excerpts: Commentary from a (Ryan) appraisal: Here is a bit of commentary in one of my recent appraisal reports. This is only part of what I say because I’m a man who needs a few paragraphs. One box just isn’t enough.

“At the least we ought to describe the market as showing a downward seasonal shift, though it’s possible we can call this a downward cycle if the trend persists over time. For now, it is most reasonable to categorize the market as having growing uncertainty and blatantly inflamed downward seasonal price declines compared to a normal seasonal trend. At the least, properties are clearly selling for less than they did several months ago. The regional median price has ticked down about 7% since May, which is $45,000. This doesn’t mean every property is worth $45,000 less, but it’s been clear buyers have been resisting paying higher prices.”

Okay, one last thing about size: During the beginning of the pandemic there was a blatant spike in home size due to a greater focus on larger homes at higher prices. This spike basically peaked one year ago as size has started to normalize. Now let’s keep watching to see what happens to size. Will we see smaller homes more often as first-time buyers flood the market? Will we see fewer sales at the highest prices? To be determined.

To read more, click here

My comments: Scroll down the page for more comments from Ryan. Markets are changing in many areas, but are complicated by price range, size, etc. I remember the easy days of market condition adjustments 1% per month up or down, for example, to apply to all detached home appraisals. Ryan has been writing about the ups and downs of his market for a long time. Maybe you can use some of his ideas, graphs, and/or explanations in your appraisals.


Navigating a Changing Market

by Isaac Peck, Editor

Excerpts: … senior leaders at AMCs, lenders and the GSEs have noted that slower appraisal volume will favor those appraisers who can stay in communication with their clients and provide faster turn times. “During the heyday of 3 percent interest rates, it was acceptable for appraisers to take three to four weeks to complete an appraisal and forget to update the client. Now that volume has declined to normal levels, those appraisers who aren’t providing good customer service may see their businesses suffer,” remarked a senior executive at a major bank.

At the end of the day, (Ryan) Lundquist says his goal is to report what is happening in the market right now—accurately and without sensationalism. “I’m constantly changing what I say in my appraisals, and I’m very careful of boilerplate and canned statements. A quick change in interest rates has led to a quick change in the market. My appraisals talk about more stable prices in my area but also about uncertainty regarding the future. Pending volume is softening, available listings are skyrocketing, and it is taking longer to sell—but there are still stats that suggest there is heavy competition for certain homes. It changes by the week. There’s no easy way to quickly do this, it takes effort. There’s no such thing as being a market expert without putting in the time to be an expert,” argues Lundquist.

To read more, click here  

My comments:  This article uses AEI data, graphs, and reports from June. Some are out of date in September. I follow AEI (American Enterprise Institute), which has excellent data and reports. For more info on AEI, click here 

The MBA data, loan application volume (see below) is the future of appraisal volume. Using recent September data, loan applications are below the levels in 2019 and still dropping. I have a graph of this every month in my paid monthly newsletter. Loan applications went up this week but are still below 2019 levels.

The upcoming October issue of the monthly Appraisal Today has an article, “Which are your best current and former AMC/lender clients? What do they want?” The Big Three: Turn Time/Quality/Fee. I discuss what lenders want and how to provide better service and get more business. Number 1 for lenders (AMCs’ clients) has always been turn time.

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 VA changes, Driving vs. office time, unusual homes, mortgage origination stats, etc.



Tube-Shaped Home in Florida Asking $1.15M

Excerpt: The one-bedroom, two-bathroom home (3,216 sq.ft. and .26 acre lot), is listed for $1.2 million. The price includes a detached garage, which currently has a pool table, lofted bedroom, and office. The listing has a 3D tour and T3 photos.

The upper level includes the bedroom, a bath, and access to a deck overlooking the backyard. The compound features a back area with a pool, hot tub, and seating areas.

“The whole house is set up for entertaining,” Helgren (real estate agent) says. There’s a bar and a kitchen with four ovens. From the cook area, a door leads to an outdoor kitchen near the pool. The home is next to a walking and biking trail that goes for more than 40 miles.

To read more, click here

To see the listing with lots of photos, click here

My comments: An aerial photo shows the nearby homes look like they are all standard tract style homes. Wonder how they got a permit for this home


Comparison of lender and non-lender appraisals

In this article, I go over the pluses and minuses of lender vs. non-lender appraisals to help you decide if you want to do non-lender appraisals. They are very different. Below is an excerpt about the pluses and minuses of different types of non-lender work.

(Note: I have written many articles about specific types of non-lender appraisals and have done non-lender appraisals for many types of clients, except eminent domain/right of way.)

Plus: Very well paid. Repeat business.
Minus: Must be willing to testify in court. Sometimes have to listen to negative, personal comments about the other spouse.
Tip: Don’t believe it when they say there will be no testimony.
Litigation support

Value dispute: loss of a view, fence line, almost anything people argue about.
Plus: Very well paid.
Minus: Must testify in court. Expertise required.

Private sales. Tenant, friend, or relative wants to buy. Work for buyer, seller, or both.
Plus: Higher than AMC fees. Paid in advance or at the door.
Minus: Sometimes differences of opinion between buyer and seller.

Pre-listing, pre-purchase, pre-sale appraisal
Plus: Good fees, paid at the door
Minus: You may have some hassles with the real estate agent if they disagree with you.

Rent survey
Done for divorce and sometimes for estates.
Plus: Good fees, paid in advance
Minus: You may need to go way back in time. Be sure to charge extra. Can be difficult getting accurate historic rents for homes.

Insurance companies. Before and after being damaged or destroyed.
Plus: Good fees.
Minus: Difficult to market. Mine have all been from referrals. If the building has been completely destroyed, it can be difficult to find out what it was like before being destroyed.

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U.S. House Passes VA Appraisal Modernization Legislation

House Bill 7735 “Improving Access to the VA Home Loan Act of 2022”

Excerpts: “The bill will encourage important reforms to the agency’s requirements regarding when an appraisal is necessary, how appraisals are conducted, and who is eligible to conduct an appraisal. This legislation is an important first step towards broad modernization of VA appraisal processes and could make veterans’ home purchase offers more viable in today’s competitive housing market.

Changes include:
(1) certification requirements for appraisers;
(2) minimum property requirements;
(3) the process for selecting and reviewing comparable sales;
(4) quality control processes;
(5) the Assisted Appraisal Processing Program;
(6) the use of waivers or other alternatives to existing appraisal processes
Also mentioned was Desktop appraisals, although that was approved in July.

To read more in this article, click here

To read the House bill, click here

My comments: Changes are too late, of course. Appraisers are not busy in many areas. Sales are slow, and sellers are more willing to accept VA loans. Lenders have always wanted VA appraisals to become more like conventional appraisals.

VA has always been an excellent appraisal opportunity. It looks like changes are coming. The VA puts the veterans as their top priority, not making money. They are an excellent client.


Appraisal Institute sends a letter on May 23 opposing the VA legislation and its Senate counterpart S. 4208

The AI believes that concerns about slow VA appraisal turnaround times are overblown. In a May 13 letter to the House Veterans Affairs Committee, AI noted, “We believe the VA appraisal process is sound and deserves broad support by the mortgage and housing sectors. We believe there are ways in which the program can be enhanced – education and awareness on the AAPP program, being one.”

To read Senate Bill S.4208 (Proposed Companion bill) – Improving Access to the VA Home Loan Act of 2-22, click here 

The AI letter discusses Turn times, Tidewater, VA Fee panel, and other topics.

To read the Appraisal Institute letter, click here


How Much Time Do Appraisers Spend in the Office vs. the Car?

McKissock Survey

Excerpts: The vast majority of respondents said that they spend at least 50% of their workday in the office these days—with many spending 70-80% of the day in the office. Here are their comments regarding why this is, how their time is split between different types of tasks, and how they manage their time to maximize efficiency.

A few of the appraiser comments:

“Homeowners often think the site visit is all there is to an appraisal. I tell them, ‘This is the fun, easy part. I get to meet nice people and see nice homes, then I get to spend several hours of quality time with my computer screen.'”

“When I first started appraising real estate in 1986, most of the time was in the field, about 80%. Now it’s 80% in the office.”

“Makes me sure appreciate getting to go back out on the field and/or drive around. The ‘real’ question is: How much time is spent thinking about a difficult job and write up? Too much sometimes.”

“Inspections in a rural area put me on the road up to 200 miles in one day. Then writing the appraisal from home. Usually one day in the office to manage new assignments and file all of my work files weekly.”

“I currently review appraisals and consult with the lending team for appraisal questions and products for a large bank in the Northeast. All time is spent in the office.”

To read more, including appraiser comments, click here

My comments: The article includes many comments from appraisers regarding how their time is split between different types of tasks, and how they manage their time to maximize efficiency.

When I started my business over 35 years ago, I worked 5 Bay Area counties, drove a lot, and subscribed to 5-6 local MLS. I kept going to fewer and fewer counties over time. For the past 10 years, I have only been appraising in my small city. Why? I finally figured out that driving takes too much time, especially with the sometimes heavy Bay Area traffic. Appraisers sell our time. Once time is gone, you can never get it back. I wanted to make more money per hour by driving fewer hours.

Now that business is slow in many areas, some appraisers are considering expanding their geographic area. But lenders have always wanted fast turn times. Definitely a conflict.


Fennell Residence, Portland, Oregon

Excerpts: “The Fennell Residence (2,306 sq.ft.) presented a unique challenge as the site was “on” the Willamette River as opposed to “by” the river. The project is focused on the poetry of the ripples and contours of the river, it’s never ending flow, the view, and the interrelationship concerning the play of the sun and moon as it courses through the days of the year. Curved glue laminated beams were used to capture the timeless sense of flowing water and time passing to imbue the space within and its relationship with the river creating a spiritual and poetic sense of space.”

“The Fennell Residence belongs on the water; if it were built anywhere else it would make little sense. Whether it is the undulating forms, which seem to follow the ebb and flow of the water, or the expanse of glazing that throws back a reflection of the sky just as the water beneath it does. The Fennell Residence dissolves into the river.”

To read more and see the photos, click here

My comments: Many thanks to Lisa Forbes for posting a link on the National Appraisers Forum, an email chat group, the only appraiser “social media” I regularly use. I have been a member since soon after it was started by Steve Smith as the Inland Appraisers Forum, who still does regular posts. For more information on the National Appraisers Forum click here

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 go to Or call 510-865-8041, MTW 7 AM to noon, Pacific time.

My comments: Rates are going up. Some appraisers are very busy, and others have little work. Varies widely around the country.


Mortgage applications increased 3.8 percent from one week earlier

Mortgage applications increased 3.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 16, 2022. Last week’s results include an adjustment for the Labor Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 3.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 14 percent compared with the previous week. The Refinance Index increased 10 percent from the previous week and was 83 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 11 percent compared with the previous week and was 30 percent lower than the same week one year ago.

“Treasury yields continued to climb higher last week in anticipation of the Federal Reserve’s September meeting, where it is expected that they will announce – in their efforts to slow inflation – another sizable short-term rate hike. Mortgage rates followed suit last week, increasing across the board, with the 30-year fixed rate jumping 24 basis points to 6.25 percent – the highest since October 2008,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “As with the swings in rates and other uncertainties around the housing market and broader economy, mortgage applications increased for the first time in six weeks but remained well below last year’s levels, with purchase applications 30 percent lower and refinance activity down 83 percent. The weekly gain in applications, despite higher rates, underscores the overall volatility right now as well as Labor Day-adjusted results the prior week.”

The refinance share of mortgage activity increased to 32.5 percent of total applications from 30.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 9.1 percent of total applications.

The FHA share of total applications decreased to 13.3 percent from 13.4 percent the week prior. The VA share of total applications decreased to 10.9 percent from 11.3 percent the week prior. The USDA share of total applications decreased to 0.6 percent from 0.7 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 6.25 percent from 6.01 percent, with points decreasing to 0.71 from 0.76 (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 5.79 percent from 5.56 percent, with points increasing to 0.46 from 0.39 (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 5.85 percent from 5.71 percent, with points increasing to 1.15 from 1.12 (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 5.40 percent from 5.30 percent, with points increasing to 1.06 from 0.89 (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 5.14 percent from 4.83 percent, with points increasing to 0.99 from 0.52 (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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