Appraisers and Local Market Analysis

By Woody Fincham, SRA, AI-RRS, ASA

Excerpts: Social media and the mainstream media make a mess of these markets even in the best of times. They do not have the bandwidth to cover local markets. When you are in a metropolitan statistical area like Charlottesville and Waynesboro/Staunton you get some reporting from the local news. Still, if it is not driven to get online clicks from hyperbole it usually is not worth reporting. National data simply does not apply to the local real estate market and the closest large markets are Richmond and Washington DC. Neither are not great metrics for what our local markets are doing.

I think everyone has heard the old saying, “You can’t see the forest for the trees.” And that is true. We are in the middle of a market transition and exactly how it is transitioning is extremely hard to predict. The best market analysis is always retrospective, as they say, “Hindsight is 20/20.” Until we get past this period over the next few months it may be hard to say definitively what is exactly happening. As an appraiser, it is super important to understand how to gather and analyze relative data.

So, what metrics are worth watching?

  • Inventory levels
  • Absorption rates and marketing times
  • Actual days on market (DOM)…

To read more and see the graphs, click here

My comments: Read this article, including the case study. See if there are data types and graphs you can use in your appraisals. Your clients count on you to let them know the market today, not in the past. Of course, I agree with this. Appraisers have the most valuable data and analyses in a changing market: listings, pendings, price changes, etc.

Appraisal Neighborhood Analysis

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 retirement, liability, ADUs, appraiser cartoon,  real estate market, Appraisal business, unusual homes, mortgage origination stats, etc.


Massachusetts Cape With a Massive Underground Vault for $850K

Excerpts: 4 bedroom, 3 bath, 2,400 sq.ft., 1.84 Acres

This 7,200 sq.ft. climate controlled storage spot is hidden underground. The vault is constructed with 4-foot-thick, reinforced concrete walls and is plumbed for a fire suppression system. Vault built in 1959 for The Bank of Boston, by the Army Corp of Engineers.

“It’s a modern Cape with two bedrooms upstairs and two downstairs,” Maiser says. “The kitchen has soapstone countertops and Wolf appliances. The living room looks out over the garden that is on top of the vault.”

“The vault, located across the driveway, was built for the Army Corps of Engineers in the late ’80s as a place to store bank records off-site,” explains listing agent Greg Maiser (agent).

“The house was built in 1988, so someone had bought the parcel that featured a deconstructed vault,” Maiser adds. “It’s a really unique, 7,000-square-foot vault because it is larger than a lot of houses, and obviously is the main driver of this property.”

“We have had a lot of interest from people looking for it to serve as a large crafts area and from people who have an art business,” he notes. “It’s a nonconforming use, so there are a lot of things you could do with the property.”

To read more and see more photos click here 

My comments: Bank vault adjustment? HBU????? Price drop?


The Two States of Anxiety for an Appraiser – Funny, Realistic Cartoon!!

By Steve Sanders

About the author

Mild mannered appraiser by day, cartoonist & illustrator by night. Steve and his sweet wife, Renae, live in the wilds of Mississippi where he’s been an appraiser for 30 years. He loves his kids and grandkids and hopes to retire a gazillionare by the age of 55.

To see this cartoon, click here

To see all Steve’s Buzz cartoons, click here 

My comment: You will laugh ;>


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Thinking about retiring from appraising?

Be sure to get E&O “tail” coverage for appraisals you did before you retired!

Once you stop paying E&O, your coverage stops for all appraisals done before that date. Check with your E&O insurance company to see if they offer tail coverage and what the requirements are.

2022 business has been very slow for many appraisers. But what will happen in the future when buyers say they paid too much or lenders say the appraisal was too high or not USPAP compliant for appraisals you did in the past? You need coverage for those years.

Sample costs for tail coverage:

Length of Extended Reporting Period

% of Company Total Annual Premium

One Year              100%

Two Years             135%

Three Years          170%

Five Years             200%

Some E&O Insurance companies offer free tail coverage with certain criteria, For example:

  • Must be appraising for at least 20 years
  • Must be insured by the company for the past 5 consecutive years
  • Must be retiring
  • Must be 65 or older or permanently disabled

Only about 1 in 10 retirees without free coverage purchase tail coverage.

An informal definition of Tail Coverage: Tail coverage protects a business when a claim is made after a policy has expired or is canceled.

The formal definition of Tail Coverage:

“Extended Reporting Period” means the applicable period of time after the end of the Policy Period for reporting Claims arising out of Wrongful Acts committed or alleged to have been committed prior to the end of the Policy Period and on or subsequent to the Retroactive Date, and otherwise covered by this Policy.

Many thanks to Liability Insurance Administrators for this information.

I regularly write about retirement issues in my monthly newsletter, including tail coverage. Also, every year, usually in July, I have an annual E&O issue discussing liability topics, most frequent claims, where to get insurance, disclaimers, etc.

To read more about E&O and retirement topics, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.

If this short discussion helped you understand why you need “tail” coverage, it is worth the subscription price to get more E&O advice!


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If you have any comments or info on any topics, please hit the reply button!! I’m always looking for something new ;>


ADUs and Fannie – Useful Links

Appraising Accessory Dwelling Units (ADUs) for Fannie Mae

Fannie’s Graphics version

To watch, click here


Fannie: What is required for accessory dwelling units?

Selling Guide section on ADUs

To read, click here


How to Identify a Single-Family with ADU vs. Two-Family Property By McKissock

To read more, click here here

My comments: Mckissock’s blog post above is sometimes relevant for an appraisal. A subscriber called me recently asking about ADUs and Fannie. I sent her the text Fannie link and also said that local ADU regulations can vary widely. Why is there a dwindling pool of appraisers – from the appraisers’ view


Why is there a dwindling pool of appraisers – from appraisers’ view

National Real Estate Post Video (6 minutes)

Topics include residential appraisals, appraisers, CFPB, appraisal automation, recommendations to challenge appraisals, etc. it has nailed what’s going on with the ongoing denigration of appraisers by Government Agencies, FNMA, HUD & so on.

That is, WHY is this happening? What is the true agenda?

All appraisers, even Commercial only, should watch.

To watch the video, click here

My comments: The video presentation is a bit “over the top,” but the two guys have been doing these videos for many years, focusing on mortgage brokers and loan officers. This video features Brian Stevens.

They also see the appraiser’s side. When they were first starting, a local appraiser did a show about appraising for a while.

Frank Garay & Brian Stevens are hosts of the National Real Estate Daily Show. Their video blog has over 100,000 unique viewers each month and gets tens of thousands of views on each daily show. It started in 2007 in Vacaville, near Sacramento, CA.

I have subscribed to their email notifications since soon after they started. They were sometimes a bit crazy and entertaining with costumes etc.

Thanks to Craig Gilbert for posting this link on the National Appraisers Forum. Some of his comments are at the top of this write-up.


$725K Home in Sacramento – Trippy, Whimsical Interiors has Gone Viral. Original price: $825,000

Excerpt: 4 Bedrooms, 2 baths, 2,320 sq.ft., 4,356 sq.ft. lot

It was built in 1940. In 1997, the 2,320-square-foot house was sold to a prominent local psychiatrist who transformed the space into his own eccentric work of art.

From the outside, the home seems perfectly proper. And then, you take a peek inside. “The interior was inspired by the four elements: earth, water, fire, and sky,” says neighbor and Janet Carlson (listing agent). “Curved linear lines were preferred. He had a fascination with prime numbers as well, and astrological numbers go up the staircase.”

The wild designs that cover the walls and ceilings are made of caulking compound, paint, Styrofoam, and wood.

“We have had art groups interested in the home, as well as artists and flippers. It’s a large property for Curtis Park with a full basement that is hard to find. Originally, the house was designed as a three-bedroom with one bathroom,” she adds. “One of the owners added the basement and second story, but that goes back about 50 years or so. The hidden storage room has also attracted people looking to store their valuable collections.”

To read more and see more photos, click here

To see the listing with the address and 75 photos, including the exterior, which looks like a “normal” house, click here

My comments: Fun to look at but does it appeal to many buyers? Appraise “as if” vacant? Cost to cure? Adjustment? Effect on value?  Why price drop?


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 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 decreased 4.5 percent from one week earlier, lowest level since 1997

Mortgage applications decreased 4.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 14, 2022.

The Market Composite Index, a measure of mortgage loan application volume, decreased 4.5 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 7 percent from the previous week and was 86 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 38 percent lower than the same week one year ago.

“Mortgage applications are now into their fourth month of declines, dropping to the lowest level since 1997, as the 30-year fixed mortgage rate hit 6.94 percent – the highest level since 2002,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The speed and level to which rates have climbed this year have greatly reduced refinance activity and exacerbated existing affordability challenges in the purchase market. Residential housing activity ranging from housing starts to home sales have been on downward trends coinciding with the rise in rates. The current 30-year fixed rate is now well over three percentage points higher than a year ago, and both purchase and refinance applications were down 38 percent and 86 percent over the year, respectively.”

Added Kan: “With rates at these high levels, the ARM share rose to 12.8 percent of all applications, which was the highest share since March 2008. ARM loans continue to remain a viable option for borrowers who are still trying to find ways to reduce their monthly payments.”

The refinance share of mortgage activity decreased to 28.3 percent of total applications from 29.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 12.8 percent of total applications.

The FHA share of total applications increased to 13.6 percent from 13.5 percent the week prior. The VA share of total applications decreased to 10.7 percent from 10.9 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 ($647,200 or less) increased to 6.94 percent from 6.81 percent, with points decreasing to 0.95 from 0.97 (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 6.31 percent from 6.25 percent, with points increasing to 0.67 from 0.61 (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 6.63 percent from 6.61 percent, with points decreasing to 1.60 from 1.71 (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 6.09 percent from 6.12 percent, with points decreasing to 1.18 from 1.30 (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 increased to 5.65 percent from 5.56 percent, with points remaining at 0.90 (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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