Unique Properties, Rocket Mortgage Sues HUD, Trump Shifts in Housing Market?
December 13, 2024
What’s in This Newsletter (In Order, Scroll Down)
-
- LIA ad – Each appraisal is unique
- The Ultimate Guide to Unique Property Appraisals
- America’s Most Expensive Property Is Sitting in a Flood Zone—Will Anyone Buy the $295 Million Estate?
- Rocket Mortgage Sues HUD Over Regulatory, Enforcement Discrepancies
- Donald Trump’s Second Term Could Bring ‘Significant Shifts’ to the Housing Market
- Report: What’s Driving the Recent Refi ‘Boom?’
- Mortgage applications increased 5.4 percent from one week earlier
- —————————————————————————-
- Appraisal Business Tips
Humor for Appraisers -
Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!
————————————————————————————————————-
——————————————————————————————
The Ultimate Guide to Unique Property Appraisals
Excerpts: When faced with a truly unique property, the standard approach of pulling recent comparable sales from the neighborhood simply won’t cut it.
These properties require a real estate appraiser with a different mindset and a more creative approach to valuation.
Here’s a quick break down of exactly how unique property appraisals differ from traditional approaches:
Breaking Down the Time Barrier
One of the most common misconceptions is that we can only use recent sales. For unique properties, this simply isn’t true. Here’s why:
Expanding Geographic Boundaries
Location matters, but for unique properties, finding truly comparable homes often requires the appraiser to look beyond the immediate neighborhood:
The Bottom Line
Appraising unique properties requires breaking free from traditional constraints while maintaining professional standards.
To read more, Click Here
My comments: Good summary of the issues. Read the details plus a table comparing traditional and unique properties. Almost all appraisers appraise unique properties, if only occasionally. This is written for real estate agents, but very useful for appraisers.
I regularly hear about AMCs trying to find an appraiser to do one of these properties. They keep shopping for low fees and fast turn times. After a while they finally go with the appraiser who can do them at a good fee and reasonable turn times.
If you can appraise unique properties you have a substantial advantage over less experienced appraisers. Now is an excellent time to try doing one, especially if your business is slow now.
—————————————————————————————-
America’s Most Expensive Property Is Sitting in a Flood Zone—Will Anyone Buy the $295 Million Florida Estate?
Excerpts: The sprawling Florida mansion sits in one of the most vulnerable places in the US to climate-driven disasters
Florida continues to have a lot of appeal for the uber-wealthy because there is no state income tax, and many people continue to flock there for this reason, irrespective of insurance costs, and live in very expensive homes on or close to the water,” says Cara Ameer, a real estate professional in Ponte Vedra, FL.
As for the Naples property, Ameer adds: “You essentially have your own private island here, and the long marketing time may simply be due to aspirational pricing for a unique property, which can take time to find the buyer audience for this home.”
Luxury real estate sales remain as hot as ever, along America’s coasts—places like Malibu, CA, and Palm Beach, FL, where rising sea levels and storms dominate headlines. In other words, billionaires aren’t balking.
The wealthy often sidestep hurricane season altogether, jetting off to other estates when the storm threat peaks. And when they do occupy these properties, they’re armed with every resource imaginable—even private emergency response teams.
To read more, Click Here
To see the listing, with many details, Click Here
—————————————————————————————-
Rocket Mortgage Sues HUD Over Regulatory, Enforcement Discrepancies
Excerpts:
Rocket seeks dismissal of the DOJ’s October lawsuit alleging the lender committed racial appraisal bias.
“Our reputation is not for sale,” the President of Rocket Companies, Bill Emerson, told NMP this morning, before the announcement that one of the nation’s largest mortgage lenders had sued federal regulators had fully seeped into consciousness of an industry just waiting for a lawsuit like this to happen.
“We believe that they’ve got six fatal flaws in their process, and our lawyers are going after that right now,” Emerson says.
Rocket Mortgage is taking the U.S. Department of Housing and Urban Development (HUD) to task in an effort to defend itself against allegations of appraisal bias levied against the lender in an October lawsuit filed by the Department of Justice (DOJ).
To read more, Click Here
My comments: I wrote in the October 25, 2024 issue about this bias lawsuit against Rocket, Solidifi AMC and the appraiser. To read the issue, Click Here
Rocket has plenty of money for legal defense. Solidifi has much less money available I suspect. Appraisal business have little or no defense money, but may be able to get assistance from their E&O company.
—————————————————————————————-
Are you getting too many ad-only emails?
4 ways to get only the FREE email newsletters and NOT the ad-only emails.
1. Twitter: https://twitter.com/appraisaltoday Posted by noon Friday
2. Read on blog www.appraisaltoday.com/blog Posted by noon Friday. You can subscribe to the blog in the upper right of each blog page. NOTE: the popular ads with liability tips are below the first topic on my blog posts.
3. Email Archives: https://appraisaltoday.com/archives
(posted by noon Friday) The link is above and to the left of the big yellow email signup form. Newsletters start with “Newz.” Contains all recent emails sent.
4. Link to the 10 most recent newsletters (no ads) at www.appraisaltoday.com. Scroll down past the big yellow signup block. The newsletters have abbreviated titles, taken from their blog posts.
To read more about the 4 ways, plus information on why I take ads, etc.
———————————————————–
Appraisal: Profession, Industry or Trade?
By Martin Wagar, MNAA, ASA, IFA, RAA
In the December issue of Appraisal Today.
ORDER BY MIDNIGHT DECEMBER 31 AND GET A 2024 TAX WRITE OFF!
To order the newsletter, Click Here
Excerpts: This issue is very controversial with many different opinions. The first printed comments were in 1932, in the Appraisal Journal, published by AIREA, (predecessor of the Appraisal Institute) Volume 1, Number 1 and republished in October 1982 edition.
INDUSTRY
“Industry refers to an economic activity that deals with the production of goods like iron and steel industry, extraction of minerals like coal mining industry and the provision of services like tourism industry. The industry is divided into three sectors as primary, secondary, and tertiary sectors.”
PROFESSION
“A profession is a type of occupation that requires specialized education, training, and expertise. It’s typically governed by a set of standards or ethics and often involves a commitment to ongoing learning and development.
Professions usually have formal qualifications, such as degrees or certifications, and are often associated with a professional body or association that oversees the standards and practices within that field. Examples include doctors, lawyers, engineers, and teachers.”
Steve Smith, SRA, MAI comments on” Vocational Appraisers”
“They took prep courses from schools that teach to the exam, never took
any advanced courses, only fluff CE classes since licensed. They started with a
Template and Auto Adjustment. If they don’t hit the sales price by bracketing, they will throw out a lower sale and go get a higher one. I was trained to do 3 per day. It took the recession of 1979-84 before I started to change. I was that vocational appraiser, except in the beginning, we hand wrote the reports.”
To read the full article, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.
Not sure if you want to subscribe?
Sign up for monthly auto renewal for $8.25!
Cancel at any time for any reason! You will receive a prorated refund.
$8.25 per month, $24.75 per quarter, and $89 per year (Best Buy)
or $99 per year or $169 for two years
Subscribers get FREE: past 18+ months of past newsletters
What’s the difference between the Appraisal Today free Weekly email newsletter and the paid Monthly newsletter? Click here for more info.If you are a paid subscriber and did not receive the December 2024 issue emailed on Monday, December 2, 2024, please email info@appraisaltoday.com, and we will send it to you. You can also hit the reply button. Be sure to include a comment requesting it.
———————————————————————————–
Donald Trump’s Second Term Could Bring ‘Significant Shifts’ to the Housing Market
Excerpts: President-elect Donald Trump‘s second term in the White House could bring “significant shifts” to the housing market, according to the new 2025 housing forecast from the Realtor.com® economic research team.
Trump, who first gained fame as a real estate developer, will take office in January. During his previous term, the Republican pushed for tax cuts, deregulation, and business-friendly policies to spur economic growth.
If these initiatives return in his second term, they could have a big impact on everything from mortgage rates to new home construction, according to the new forecast.
Mortgage rates expected to remain elevated
The forecast projects that mortgage rates will remain little changed in 2025 despite Trump’s promise on the campaign trail to cut home loan interest rates to 3% or lower.
The report forecasts that mortgage rates will average 6.3% across 2025, and end the year at 6.2%. That’s a leg down from the 6.7% average expected across 2024 by year-end, but still well above the 4% historical average recorded from 2013 to 2019.
Presidents have little direct control over mortgage rates, which follow trends in the bond market. However, over time, economic trends can influence rates—with a strong job market, high inflation, or increased government deficits among the factors that tend to push interest rates higher.
To read more, Click Here
To read the full NAR report, Click Here
My comments: This is the time of year for looking back at 2024 and ahead for 2025. What will happen with the new administration is significant factor. I have been forecasting lower rates in 2025. There is already an increasing demand for refis and home buyers and sellers.
—————————————————————————————
What’s Driving the Recent Refi ‘Boom?’
Excerpts: Based on the extensive mortgage, real estate, and public records data sets that the company possesses, Intercontinental Exchange, Inc. has published its December 2024 ICE Mortgage Monitor Report.
-
-
- Borrowers took advantage of interest rates in the low 6% range, resulting in the closing of over 300,000 mortgage refinances in September and October, the largest in 2.5 years.
- Approximately 150K of those were rate/term refinances, and in October, for the first time in three years, rate/term volumes exceeded cash-out refinance volumes.
-
In August and September of this year, the mortgage industry saw a welcome surge in refinance activity as 30-year conforming mortgage interest rates dropped into the low 6% level. In order to understand what that brief “boomlet” in borrowing activity tells us about U.S. mortgage holders and their intentions in the current market, this month’s Mortgage Monitor delves deeply into ICE Mortgage Trends closed loan data.
To read more, Click Here
My comments: Worth reading to see what rates have been doing. ICE is an excellent source of data and analysis of mortgage trends. I follow this report and other ICE reports and data. I will be writing about forecasts for mortgage interest rates and loan volumes in coming issues of this newsletter.
—————————————————————————————-
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. We are all waiting for rates to drop in 2025.
Mortgage applications increased 5.4 percent from one week earlier
WASHINGTON, D.C. (December 11, 2024) — Mortgage applications increased 5.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 6, 2024. Last week’s results included an adjustment for the Thanksgiving Holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 5.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 50 percent compared with the previous week. The Refinance Index increased 27 percent from the previous week and was 42 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index increased 30 percent compared with the previous week and was 4 percent higher than the same week one year ago.
“Mortgage rates decreased again for the third consecutive week, with the 30-year fixed rate dipping to 6.67 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Applications increased 5 percent, driven by a 27-percent surge in refinance activity, as borrowers with higher rates acted on the chance to lower their payments. VA refinance applications were up 85 percent from the previous week, matching some of the larger swings in VA activity reported in recent months.”
Added Kan, “Purchase applications remained relatively strong and have shown annual gains in all but one week over the past three months. In addition to lower rates, purchase activity continues to be supported by sustained housing demand and inventory that continues to grow gradually in many markets.”
The refinance share of mortgage activity increased to 46.8 percent of total applications from 38.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.3 percent of total applications.
The FHA share of total applications increased to 16.5 percent from 16.0 percent the week prior. The VA share of total applications increased to 16.3 percent from 13.6 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 ($766,550 or less) decreased to 6.67 percent from 6.69 percent, with points decreasing to 0.66 from 0.67 (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 $766,550) decreased to 6.79 percent from 6.85 percent, with points increasing to 0.50 from 0.39 (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 6.47 percent from 6.49 percent, with points decreasing to 0.91 from 1.00 (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 remained unchanged at 6.12 percent, with points increasing to 0.66 from 0.52 (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 decreased to 5.81 percent from 6.24 percent, with points decreasing to 0.40 from 0.58 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
Please Note:
MBA Offices will be closed beginning on Wednesday, December 25, 2024 and will reopen on Thursday, January 2, 2025. Due to the office closing and holidays, the results for weeks ending December 20, 2024 and December 27, 2024 will both be released on Thursday, January 2, 2025.
The survey covers U.S. closed-end residential mortgage applications originated through retail and consumer direct channels. The survey has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, thrifts, and credit unions. Base period and value for all indexes is March 16, 1990=100.
———————————————————————
Ann O’Rourke, MAI, SRA, MBA
We want to know what you think!! Please leave a comment.