2024 Updated UAD and URAR – What does It Mean for You?
The Appraisal World Is Changing
January 25, 2024
Excerpts: There has been a lot of talk about the Uniform Appraisal Dataset (UAD) and Uniform Residential Appraisal Report (URAR) redesign initiative, and how it will make life easier for appraisers. What exactly does this mean? In this post, we’re providing an overview of the UAD and URAR, what’s changing, and what benefits these changes will bring.
How will these UAD and URAR changes be beneficial?
A redesigned, dynamic URAR will replace the numerous and separate appraisal forms and can be used for different property types, such as two-to-four units, condominiums, and manufactured homes, and for different scopes of work, such as interior and exterior inspections, updates, and completion assignments.
The new URAR will be better organized and populated based on the property type and characteristics.
The standardized data in the new UAD will allow appraisers to better define the property (outbuildings, additional units, site influences, energy efficient and green features, etc.).
Concerns that require attention will be easily identified in each section of the report instead of being buried in an addendum.
Photographs will be included in relevant sections to make descriptions easier for appraisers and enhance reader understanding.
To read more, Click Here
My comments: A brief summary of the coming changes. See below for more timeline information.
Freddie – Updated UAD and Forms Redesign Timeline
The Uniform Appraisal Dataset (UAD) and Forms Redesign team has released an updated timeline. The overall timeline has not changed; however, we wanted to provide the industry with more milestone details to help in development, testing and training to prepare for the new UAD and Uniform Residential Appraisal Report (URAR).
To see the timeline (from 2018 to 2026) PDF, Click Here
Too large to include in this newsletter.
To go to the Freddie UAD page (mostly technical) Click Here
To go to the Fannie UAD page, Click Here
A few comments from Dave Towne:
My concern at this point is ‘training’ materials will be available in Q4 2024, but actual implementation of the ‘new reporting process’ won’t begin until Q3 2025 with limited production, into 2026.
As someone who’s potentially interested in ‘training’ appraisers on the new process, it seems to me that providing training in Q2 2025 would be more appropriate than 6 months before. But we’ll have to see how things progress as this time-line gets more firmed up.
To read the recent appraisersblogs.com post with new comments from Dave plus other appraiser comments, Click Here
My comments: No date changes, but more information on the timeline. Maybe there will be some appraisers left to do full appraisals…
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California Glass House in Orinda, CA Lists for $10.5 Million
Excerpts: 4 Bedrooms, 4 ½ Baths, 6,195 sq.ft., Built in 2020 (after teardown of existing house), 1.43 acre lot
Designed by Robert Swatt of Swatt Miers Architects, a San Francisco-area firm that has won scores of design awards, the site-specific cantilevered house “is in a league of its own,” Newton Cane said. “It’s a gem, a one-of-a-kind piece of art that has a feeling of impossible lightness. And it’s completely private, which is huge out here—you feel like you’re in your own world.”
The 9-foot Western red cedar entry door opens to 14-foot ceilings, a glass-enclosed, refrigerated wine cellar that holds 750 bottles, a wet bar, a media room and a glass-enclosed fireplace. Travertine floors western red cedar paneling crafted to create a continuous linear element throughout the space are among the residence’s uber-luxurious materials and finishes. A sound system in the walls and ceilings provides mood music.
“The interior walls don’t have baseboards, which makes them look as though they are floating in air,” Newton Cane said, adding that the minimalist design continues in the kitchen, where the handleless cabinets are subtly accessible, and everything, including a wet bar behind a door, is cunningly concealed
To read more from Mansion Global, Click Here
To see the listing, with a virtual tour and more photos, Click Here
The Full Measure with Kevin Hecht: Economic Recap January 2024
January 30, 2024
Excerpts: Welcome to the latest installment of The Full Measure with Kevin Hecht— your destination for the most current economic insights and analyses. Catered to real estate appraisers, agents, and other professionals, this monthly blog series helps you navigate the ever-evolving economic environment. Uncover this month’s economic trends and insights—written from an appraiser’s standpoint—in the following economic recap for January 2024.
What does this mean for appraisers?
For residential appraisers, it remains imperative to remember that even as the market shows initial signs of correcting, inventory still sits at extremely supply-constrained levels from a historical context. At the same time, affordability challenges will persist at higher mortgage rate levels. As such, still-elevated sales volatility is likely in the months ahead, given the uncertainty still swirling within the economy.
Appraisers must tread carefully when utilizing 2023 comparable sale data in valuation modeling and consider localized market trends. Additionally, it becomes critical to dig deeper into granular inventory metrics beyond total listing tallies. Carefully analyzing the story behind the housing data numbers will remain crucial throughout 2024 as the market seeks to find solid footing after years of wild pandemic swings.
To read more, Click Here
My comments: This is the only economic analysis I read regularly. Written by an appraiser, for appraisers, who also teaches economics.
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New in the February 1, 2024 issue of Appraisal Today
- Planning for 2024 – Set up a Budget to Manage Your Income and Expenses
- Appraising from the Middle Ages to Now, By Michael Yovino-Young, MAI, SRA, ASA
- Appraising over 3,000 years ago. By Sanders K. Solots, MAI
- Why I am an appraiser
- Does my state reviewer have to be licensed by the state? By Tim Andersen, MAI
February is a good time to plan for 2024. Tax time is coming, so we can compare 2023 to previous years. Appraisers who do lender appraisal have very uncertain 2024 projected income due to (maybe) higher mortgage interest rates. But most of our expenses are fixed, such as CE, MLS, E&O, etc. I have tips on how to forecast for 2024. I have been through many downturns in my past 49 years of appraising.
Appraising has changed a lot since the Middle Ages and also since 3,000 years ago. These articles give us a perspective on today.
Why I am an appraiser. Some of us are retiring or quitting appraising. I am easily bored and love a challenge. Appraising is ideal for me. I go through the business and regulatory changes I experienced since 1975 and why I still love appraising.
State reviewers licensed? Tim has interesting views and analyses on USPAP that I never heard before.
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The Attack on Single-Family Zoning
by Richard Hagar, SRA
The United States Constitution, State of Washington’s Constitution, and key Supreme Court decisions all clearly state that zoning and land use regulations (police powers) should be made at the local city and community level, not at the federal or state level. However, what we are starting to see is various state governments trying to dictate to cities and towns how their communities should develop, and single-family housing appears to be one of their targets for destruction.
As an example, this past July the people in Washington’s state capital created new laws that override the local decision-making process that America was based upon. Two House Bills require that all towns and cities must rezone and allow multi-family zoning in all residential areas of their communities, not just multi-family zoned areas. House Bill 1337, requires all cities and counties to allow one or two additional housing units on a lot in all single-family zoned areas. While House Bill 1110, requires all cities with a population greater than 25,000 to rezone and allow a minimum of four housing units on all formally single-family zoned lots and a minimum of six housing units on all lots formally zoned single-family, in cities with a population greater than 75,000.
Impact on Appraising
As I explained, the lending system has issues with properties capable of being used for five or more units. One to four units are considered to be “residential” however, lots that are capable of supporting five or more units are considered commercial.
Appraiser licensing across America is similarly divided, “residential” appraisers are qualified to appraise one to four units while “commercial” appraisers are needed to appraise properties capable of supporting five plus units. 70 percent of appraisers are licensed to provide appraisals for residential properties and only 30 percent are qualified to appraise properties with five or more units. Once zoning is changed to multi-family, there will be far fewer appraisers capable of valuing these homes and appraisal fees will, at a minimum, double, again, making home buying more expensive for the very people these laws state they are “helping.”
To read more, Click Here
My comments: Hagar is spending a lot of time on this issue. It significantly affects Washington State homes. There is a good discussion on housing history going back to the mid-1800s, which I had never read before.
Keep up on what is happening where you appraise.
Many parts of the country have housing shortages, both in apartments and homes. Some are looking for ways to fix it. I have no answers. Solutions seem to be very complicated and/or expensive.
Fortunately, in my city, we have lots of vacant land in the former Naval Air Station and a few older former industrial properties. My office is across the street from a former marina (ship building in World War II), which is being redeveloped into housing: 4 story apartments and condos and 3 story townhomes.
My city is full of apartments built in the 1960s after classic Victorian homes were demolished. The biggest problem for nearby homes is the lack of off-street parking. When they were built it was one car per unit. But, more than one person usually lives in a 2 bedroom apartment. Existing homes were mostly built prior to 1930 with limited off-street parking. I have not seen an effect on value for the homes next to apartments, but it is a marketability issue for savvy buyers.
In the late 60s, I moved from Oklahoma (lots of parking) to San Francisco (very limited parking). I lived in a 3rd floor walk-up apartment. When I got home from my swing shift lab job at 11 PM, parking was tough to find. I decided never to live anywhere where I did not have off street parking.
White House Replica in Dennis, MA, built in 1849, listed for $1,175,000
Excerpts: 6 bedrooms, 5.5 baths, 3,766 sq.ft., 1.61 acre lot.
Located in Mid Cape Cod, the six-bedroom Greek Revival with stately exterior columns was built in 1849.
This former sea captain’s home features many period details throughout its 3,766 square feet. They include preserved hardwood floors, exposed-beam ceilings, and four ornate fireplaces.
The updated kitchen has custom cabinets, stainless appliances, and an island with a marble countertop. The sunroom features a cathedral ceiling.
The 1.6-acre property near Fresh Pond is zoned for residential and commercial use, and most of the furnishings are included.
To go to the MLS listing for virtual tour and 41 photos including aerial photos, Click Here
My comment: Highest and Best Use??
Opinions, Rhetoric, and Anecdotes
By J. Nathan Pippin
January 29, 2024
Excerpts: If the real estate appraiser is the person that cuts through the baseless opinions, rhetoric, and anecdotes in the marketplace, who is the person to cut through the baseless opinions, rhetoric, and anecdotes in the appraisal community? Hold that thought. I’m introducing another topic for a moment. And then we are going to talk about empty rhetoric and how there is too much of it, and too little critical thinking, in real estate appraisal today.
While visiting the property I was informally invited into a conversation with the property owners and several neighbors. Being in a semi-rural area and a small town, this type of thing isn’t unusual. The topic of the group conversation was the new camper (RV) parked in the neighbor’s front yard several doors down. I chose to sit that conversation out.
The sentiment repeated amongst the group was “that camper affects our property values”. However, none of the conversation participants offered any support for the sentiment or concern. The presence of the camper didn’t violate any ordinances or deed restrictions. There is no formal HOA either. As neighbors, they just didn’t appreciate the view of the camper and that was their argument against it.
Appraisers are commonly approached with rhetoric, opinion, or anecdotal theories that don’t hold any merit. This was no different. Nonetheless I wasn’t going to try and change their mind. (unless they wanted an appraisal report).
To read more, Click Here
My comment: Worth reading. I had never thought of appraising in these situations. Pippin is the co-author (with Tim Andersen) of a recent Appraisal Today monthly newsletter article Communicating Why You Used a Comp On the Sales Grid. Very interesting analysis including USPAP issues.
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, 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 www.appraisaltoday.com/order Or call 510-865-8041, MTW, 7 AM to noon, Pacific time.
My comments: Rates are going up and down. Many appraisers are not busy. Some are busy, usually with non-lender appraisals.
Mortgage applications decreased 7.2 percent from one week earlier
WASHINGTON, D.C. (January 31, 2024) — Mortgage applications decreased 7.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 26, 2024. Last week’s results included an adjustment to account for the MLK holiday.
The Market Composite Index, a measure of mortgage loan application volume, decreased 7.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 8 percent compared with the previous week. The Refinance Index increased 2 percent from the previous week and was 3 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 11 percent from one week earlier. The unadjusted Purchase Index increased 6 percent compared with the previous week and was 20 percent lower than the same week one year ago.
“Mortgage rates changed little last week, with the 30-year fixed rate at 6.78 percent, which is close to where it has been for the past month but lower than the recent peak of 7.9 percent in October 2023,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Applications decreased compared to a holiday-adjusted week, driven by a decline in purchase applications that offset a slight increase in refinance activity. Low existing housing supply is limiting options for prospective buyers and is keeping home-price growth elevated, resulting in a one-two punch that continues to constrain home purchase activity. The average loan size for purchase applications has picked up in recent weeks to $444,100, the largest average loan size since May 2022.”
The refinance share of mortgage activity increased to 34.2 percent of total applications from 32.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.6 percent of total applications.
The FHA share of total applications decreased to 13.8 percent from 14.1 percent the week prior. The VA share of total applications decreased to 13.3 percent from 13.7 percent the week prior. The USDA share of total applications remained unchanged at 0.4 percent from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) remained unchanged at 6.78 percent, with points increasing to 0.65 from 0.63 (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 $726,200) remained unchanged at 6.94 percent, with points decreasing to 0.45 from 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.61 percent from 6.51 percent, with points decreasing to 0.79 from 0.87 (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 6.34 percent from 6.31 percent, with points decreasing to 0.53 from 0.59 (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 6.23 percent from 6.22 percent, with points increasing to 0.59 from 0.49 (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