Newz: Drivebys, Foreclosures, Hybrids?, ASB Q and As
April 18, 2025
What’s in This Newsletter (In Order, Scroll Down)
- LIA ad: Appraisal Used in Divorce Case—Now What?
- What is a Drive-By Appraisal?
- Contemporary Architect’s Downtown Santa Barbara Home Could Set a Condo Price Record
- Top 10 U.S. Housing Markets with the Most Foreclosure Starts in March 2025
- Hybrid Appraisals – Flawed Data or Flawed Agenda?
- New ASB Q&As
- Mortgage applications decreased 8.5 percent from one week earlier
—————————————————————————————————–
Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news
———————————————————————
What is a Drive-By Appraisal?
Excerpts: This method bypasses traditional in-person appraisal methods and has grown in relevance for situations like refinancing or low-risk loans where a full interior inspection may not be necessary.
In addition to observing and evaluating the property’s exterior condition, appraisers will also assess the surrounding neighborhood, use MLS listings for home interior information, and evaluate comparable sales data to estimate property value.
Also known as “exterior-only appraisals” or “2055 appraisals,” this approach is often chosen when a full appraisal isn’t required, such as for low-risk lending scenarios or when lenders have sufficient market data to support a valuation without an interior inspection.
They are also used in situations like foreclosure when interior inspections are not possible.
Topics
- How Does a Drive-By Appraisal Work?
- Steps to Conducting Drive-By Appraisals
- Situations When a Drive-By Appraisal is Used
- Limitations of Drive-By Appraisals
- Drive-By Appraisals and Industry Standards
To read more, Click Here
My comments: Definitely the most comprehensive and understandable article on drive-bys I have read. I did many drive-bys in the 80s and 90s for lenders. I finally quit doing them on 2-4 unit properties with little info available. Also, when appraising large Victorians I did not know what had changed since 1910. Permit histories in my city are very limited prior to 1950.
I did a lot of foreclosure drive-bys when prices were dropping. I did full appraisals with interior inspections after they were foreclosed.
My most difficult drive-by was a house that was completely “trashed” after the death of the owner by a young relative drug user. It had been sold after renovation and I had no access. I interviewed relatives, neighbors, etc. to try to find out what it was like on the date of death. I always ask the estate trustee to get me access to the house before any changes are made if possible.
BE CAREFUL. DO NOT UNDERBID ON DRIVEBYS.
TOO MUCH UNCERTAINTY ABOUT THE INTERIOR CONDITIONS.
—————————————————————————————-
Contemporary Architect’s Downtown Santa Barbara Home Could Set a Condo Price Record
Excerpts: 4 bedrooms, 5 bathrooms, 3,160 sq.ft., 3,468 sq.ft. lot, built in 2017.
If it fetches its asking price of $5 million, this three-story, 3,160-square-foot residence in downtown Santa Barbara, California, will set a record as the most expensive condominium ever sold in the city.
Designed and built by Santa Barbara architect Robin Donaldson as his own family residence, the angular, solar-panel-covered home is “like nothing else in downtown Santa Barbara,” said David Kim of Village Properties/Luxury Portfolio International, the listing agent. He said the design is open and airy with many “amenities you do not see in other downtown homes.”
The condominium residence is part of a project that includes three mixed-use buildings, each with separate residential and commercial spaces. Each is designed as a live-work unit.
“He finished this project in 2017, which made him look a prophet, since Covid hit three years later, and everyone started working at home,” Kim said. There is a commercial space attached to the residence that a buyer could also purchase, Kim said.
An elevator serves all three floors of the residence.
To read more, Click Here
To see the listing with a video and more photos and details, Click Here
—————————————————————————————-
Top 10 U.S. Housing Markets with the Most Foreclosure Starts in March 2025
Excerpts: Excerpts: According to ATTOM’s newly released Q1 and March 2025 U.S. Foreclosure Market Report, there were a total of 35,890 U.S. properties with foreclosure filings in March 2025. That figure was up 11 percent from February 2025 and up 9 percent from March 2024.
Excerpts: According to ATTOM’s newly released Q1 and March 2025 U.S. Foreclosure Market Report, there were a total of 35,890 U.S. properties with foreclosure filings in March 2025. That figure was up 11 percent from February 2025 and up 9 percent from March 2024.
In this post, we dive deep into the data behind ATTOM’s Q1 and March 2025 foreclosure report to uncover the top 10 U.S. larger metro areas with the greatest number of foreclosure starts in March 2025. Those metros with populations over 200,000 included: Chicago-Naperville-Elgin, IL-IN-WI (1,254 foreclosure starts); New York-Newark-Jersey City, NY-NJ-PA (1,202 foreclosure starts); Houston-The Woodlands-Sugar Land, TX (1,064 foreclosure starts); Miami-Fort Lauderdale-West Palm Beach, FL (805 foreclosure starts); Dallas-Fort Worth-Arlington, TX (691 foreclosure starts); Los Angeles-Long Beach-Anaheim, CA (619 foreclosure starts); Atlanta-Sandy Springs-Roswell, GA (522 foreclosure starts); Riverside-San Bernardino-Ontario, CA (499 foreclosure star02ts); Philadelphia-Camden-Wilmington, PA-NJ-DE-MD (465 foreclosure starts); and Phoenix-Mesa-Scottsdale, AZ (463 foreclosure starts).
To read more, Click Here
My comments: Keep a watch on your local market’s economy for lowering prices, long days on market, listings with price reductions, etc.
My county in the Bay Area has a median price of around $1.1 million. My city had a typical decline of value of 30% (over a the 40 years I have been appraising here) when there was a downturn. But few foreclosures occurred as most home owners could afford to keep making their mortgage payments. Other cities had significant declines in 2008, up to 80% as home owners could not afford their mortgage payments when rates went up on their variable loans. Plus, fake business income and other scams made the variable rate loans appear to be more affordable. But the loans more than they could pay when payments went up with variable rates.
No one knows what will be happening in the economy with the recent tariffs, especially. If prices start going down and there are layoffs, etc. people cannot make their mortgage payments, there will be foreclosures.
What’s happened in the past downturns in your market?
To get ready, consider taking a class in REOS and foreclosures, especially if you have done none or only a few appraisals. They are very different than appraisals for mortgage loans. Hopefully the class will have tips on what to do when a foreclosed home is occupied, damage done, maybe dogs in the house, estimating repair cost, etc. Or tips where the owner keeps standing in the front lawn watering with a water hose. Of course, he was glaring at you as you drove by over and over again by trying to take a photo of the front, street scene, etc.
—————————————————————————————-
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.
—————————————————————————————-
Make use of your driving time by exercising
In the February 2025 issue of the monthly Appraisal Today
Appraising is a fairly sedentary job, with most of the time spent sitting in a car or at a desk. Do you take time to exercise every day? Do feel stressed out when you are running late for an appointment? Do you feel stressed as a deadline approaches?
One of the best and worst times in appraising is driving. Working out in the field is what attracted many of us to appraising. But the time spent driving is unproductive time.
There are so many stresses today. Exercising is a great stress reducer!
Although the exercises below are for driving, many can also be used in your office.
Head and neck exercises
Tilt your head toward your left shoulder, hold for 2-3 seconds, then tilt toward your right shoulder. To relax your jaw and face, pretend you are blowing out candles. Focus on the relaxed feeling.
Flatten your back against your seat and push your chin down, stretching your neck. Extent your head forward, then back, keeping it centered.
To read the full article with more easy exercises, plus 3+ years of previous issues, subscribe to the paid Appraisal Today at www.appraisaltoday.com/order .
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 April 2025 issue emailed on Tuesday, April 2 , 2025 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. Or call us at 510-865-8041.
———————————————————————————–
Hybrid Appraisals – Flawed Data or Flawed Agenda?
Excerpts: Brian Zitin’s (CEO, Regorra) self-serving interpretation of Reggora’s survey results on hybrid appraisals is a textbook example of twisting flawed data to fit a preconceived flawed narrative. He triumphantly proclaims that 60% of appraisers plan to perform hybrid appraisals, painting it as some groundbreaking shift in the industry. But the reality is far more nuanced and less flattering to his agenda.
“Our main question to appraisers: Do you plan to perform hybrid appraisals?
The result was a 60/40 split with 60% saying yes they will!
That is quite the controversial result and indicates a lot more education and effort will need to go into the overall hybrid rollout to get broad adoption”
Given the choice, the vast majority of those appraisers would undoubtedly prefer to conduct their own thorough, in-person inspections rather than being chained to a desk, at the mercy of a stranger’s questionable property data collection.
However, when faced with the stark choice between scraping by with hybrid work or having no work at all, it’s no surprise that many appraisers reluctantly choose the former as the lesser of two evils. Zitin conveniently glosses over this fact, instead spinning it as enthusiastic adoption of an inherently flawed system.
To read more, plus some interesting appraiser comments, Click Here
To read the original Regorra post by Brian Zitin on LinkedIn plus the comments, Click Here
—————————————————————————————-
New ASB Q&As
Topics:
2-25-01 Using Experience as Support for Adjustments
Question: If an appraiser is competent to perform a specific assignment, and has extensive experience in that type of assignment, can they support an adjustment for a property’s proximity to a park solely based on that experience?
2-25-02 Developing Alternative Adjustments in Appraisal Review
Question: An appraiser performing a review assignment has developed an opinion that the work under review contains inappropriate adjustments in the sales comparison
approach based on the data provided in the report. Is the reviewer required to develop and report alternate adjustments?
2-25-03 Market Rent of a Short-Term Rental Property _FINAL.pdf
Question: An appraiser performing a review assignment has developed an opinion that the work under review contains inappropriate adjustments in the sales comparison approach based on the data provided in the report. Is the reviewer required to develop and report alternate adjustments?
To read the answers, Click Here
—————————————————————————————-
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 decreased 8.5 percent from one week earlier
WASHINGTON, D.C. (April 16, 2025) — Mortgage applications decreased 8.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 11, 2025.
The Market Composite Index, a measure of mortgage loan application volume, decreased 8.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 8 percent compared with the previous week. The Refinance Index decreased 12 percent from the previous week and was 68 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 13 percent higher than the same week one year ago.
“Mortgage rates moved 20 basis points higher last week, abruptly slowing the pace of mortgage application activity with refinance volume dropping 12 percent and purchase volume falling 5 percent for the week. Purchase volume remains almost 13 percent above last year’s level, but economic uncertainty and the volatility in rates is likely to make at least some prospective buyers more hesitant to move forward with a purchase,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “One notable change last week was the full percentage point increase in the ARM share. Given the jump in rates, more borrowers are opting for the lower initial rates that come with an ARM, with initial fixed rates closer to 6 percent in our survey last week. The ARM share at 9.6 percent was the highest since November 2023, and this reflects the share of units. On a dollar basis, almost a quarter of the application volume last week was for ARMs, as borrowers with larger loans are even more likely to opt for an ARM.”
The refinance share of mortgage activity decreased to 41.3 percent of total applications from 43.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 9.6 percent of total applications.
The FHA share of total applications decreased to 15.8 percent from 16.3 percent the week prior. The VA share of total applications decreased to 13.7 percent from 15.7 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 ($806,500 or less) increased to 6.81 percent from 6.61 percent, with points decreasing to 0.62 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 $806,500) increased to 6.84 percent from 6.65 percent, with points decreasing to 0.30 from 0.42 (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 6.52 percent from 6.33 percent, with points increasing to 0.82 from 0.75 (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 6.11 percent from 5.93 percent, with points decreasing to 0.62 from 0.64 (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 6.11 percent from 5.93 percent, with points increasing to 0.56 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
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
Appraiser and Publisher Appraisal Today
1826 Clement Ave. Suite 203 Alameda, CA 94501
Phone: 510-865-8041
Email: ann@appraisaltoday.com
Online: www.appraisaltoday.com
We want to know what you think!! Please leave a comment.