Newz: Neighborhood Analysis, Death of the Appraisal Clipboard
What’s in This Newsletter (In Order, Scroll Down)
- LIA AD: Can’t Certify the Work
- Why Neighborhood Analysis Matters: Avoiding Costly Appraisal Mistakes By Timothy Andersen, MAI
- See the Churches That Make Divine and Affordable Homes
- Pulling comps in a softer market By Ryan Lundquist
- The Future is Now: Fannie Mae and Freddie Mac Announce UAD 3.6 Implementation Timeline and Policy Changes
- The Death of the Appraisal Clipboard By Tony Pistilli
- Mortgage applications increased 1.1 percent from one week earlier
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Why Neighborhood Analysis Matters: Avoiding Costly Appraisal Mistakes
By Timothy Andersen, MAI
Excerpts:
Neighborhood analysis is a critical component of real estate appraisal, providing insights into factors that influence property values, risk analysis, and investment decisions. A comprehensive neighborhood analysis involves delineating precise boundaries, understanding property types and architectural styles within those boundaries, assessing land use changes, and evaluating current and future economic trends.
Topics:
- Defining Neighborhood Boundaries
- Assessing Neighborhood Characteristics
- Monitoring Land Use and Development Trends
- Evaluating Economic Trends
Implications for Appraisers
Neglecting a detailed neighborhood analysis as part of the appraisal can lead to inadequate appraisal reports, potentially resulting in critiques from reviewers or issues with compliance standards (i.e., a state appraisal authority). Appraisers are advised to conduct meticulous neighborhood analyses, ensuring their reports reflect current market conditions and property characteristics accurately.
To read more, Click Here
My comments: Well written and worth reading. Includes references. Defining the neighborhood is critical for all types of appraisals. This article focuses on residential, but the topics apply to commercial and other uses.
The neighborhood is where you first look for comps and do the analyses above. Going to a similar neighborhood for comps may be needed, but can be tricky.
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See the Churches That Make Divine and Affordable Homes
Excerpts: 2 bedroom, 2.5 bath, 1,576 sq.ft., 0.5 acre lot, Built in 1900 List price: $350,000
The typical home’s amenities might include modern appliances and open layouts, but what about a bell tower and 125-year-old stained-glass windows?
“You can feel all those people who came before you, all the weddings and funerals,” agent Ted Murphy Jr. with E.J. Murphy Realty, who is selling a converted church in Cornwall, CT, tells Realtor.com®. “And, oh, yeah, you’ve got a bell tower. You can ring that bell anytime.”
The former Congregational church, built in 1900 and converted into a stylish 2-bedroom, 2.5-bathroom single-family home, is listed for $350,000. But come with a contractor.
“It needs a lot of work,” admits Murphy.
The HVAC system is good, but the roof should be replaced, he says, estimating that it will cost $200,000 to $300,000 to get the church back into shape, a big reason for the relatively low price tag, which comes out to $222 per square foot.
The church trend
Since about 2000, the number of Americans who belong to a church, synagogue, or mosque has plummeted from around 70% to around 47% in 2021.
This has led to a plethora of churches across the country coming on the market. Bad for religion, but good for those jonesing for history and a renovation project.
Consider looking in the Northeast—where church attendance is half that of the South, meaning more inactive churches are for sale.
To read more, Click Here
To see the listing above with 35 photos, Click Here
My comments: I have appraised religious facilities but never a church converted to a home. Very interesting! Check out the price declines in the link to the listing.
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Pulling comps in a softer market
By Ryan Lundquist
Excerpts:
5 things to know about comps today.
1) Comps tell us about the past (not the present)
2) Give strong weight to properties getting into contract
3) Don’t price to other overpriced listings
4) You’re not giving up value if you lower the price
5) Take negative price stats seriously
To read more, Click Here
My comments: I love Ryan’s illustration above! Written for real estate agents, but useful for appraisers.
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A brief AMC history from 1967 to now – from 5% to over 80% of the appraisal market
In the November 2024 issue of Appraisal Today
I wrote my first article on AMCs in the December, 1994 issue. At that time,
after speaking with various lender and AMC personnel, I estimated a 5% market share . Now, it is about 80%.
You will see below, that there are many more AMCs now than in 1994 and
1998. The older AMCs did not do significant shopping for low fees or have many requirements (scope creep).
Starting in 2020, Covid 19 had a very significant effect with mortgage
lending ups and downs in a very short period of time. You know what AMCs are like now that it is slow: shopping for the lowest fee. Not very long ago, they were paying very high fees when demand was strong. Maybe you will quit working for them or cut way back.
Since LSI, the first AMC, started in 1967, there were always appraisers who
worked for AMCs.
Back in 1994, appraisal fees were based on supply and demand, but with
not as many changes in fees as in 2024. But appraisers complained about low
fees. No excessive requirements, of course. There were some collection problems with smaller AMCs.
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The Future is Now: Fannie Mae and Freddie Mac Announce UAD 3.6 Implementation Timeline and Policy Changes
Excerpts: If you’re a residential appraiser working with government-sponsored entity (GSE) loans, this is one of the most important developments you’ll see this decade.
Fannie Mae’s supplement provides detailed information on how appraisal content will evolve. We’ll see alignment with ANSI Z765-2021 for measurement standards, clearer distinctions in quality and condition ratings, and expanded guidance for reporting complex property features, including leaseholds, ADUs, disaster mitigation, solar panel ownership, and mixed-use analysis.
The expectations for describing the highest and best use, market influences, and reconciliation are more defined and will require a more narrative-driven and evidence-supported approach.
Freddie Mac has similarly updated its Guide to reflect these changes. They now include:
- Refined definitions and labels
- Updated condition and quality rating standards
- New UCDP submission requirements for Restricted Appraisal Update Reports and Completion Reports
- More formalized expectations for measured square footage
To read more, Click Here
My comments: I have written 4 articles on this topic. My most recent article, in the July issue, is From UAD 2.6 to UAD 3.6. What appraisal software vendors are doing. I included SFREP, a la mode, ACI and Bradford. None of them are fully ready to go, including updated mobile apps. One article was a review of the new 7 hour Fannie class, another was What is new in the New URAR where I go through every page of SFR1 (SFR example) and list what is new.
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The Death of the Appraisal Clipboard
By Tony Pistilli
From Data Collectors to Data Analysts
This shift in workflow redefines the appraiser’s role. Instead of spending time manufacturing the report, appraisers become analysts and reviewers of data already collected and structured by technology. This transformation plays to the appraiser’s highest and best use – market knowledge, valuation judgment, and critical analysis – while technology handles the repetitive work. Much like the dental hygienist and the dentist or the paralegal and attorney, appraisers will always be in control of the report, but relieved from the monotonous and repetitive processes.
One of the biggest and best impacts of mobile technology adoption is decreased turnaround time. What used to take two to three days after a site visit – measuring the property, typing the report from field notes, drawing floor plans, and uploading photos – can now be done from the appraiser’s vehicle minutes after the inspection ends.
To read more, including 20 plus appraiser comments, Click Here
My comments: If you want to continue doing GSE appraisals, you have to use UAD 3.6 starting November 2, 2026. Now that I have written about it and seen live demos from software vendors, using a clipboard is not feasible. I cannot even imagine how to do it. The amount of data needed, ad comparted with the current forms, is very large.
If you don’t do GSE appraisals you will be using the current forms, which will be used for non-lender and lenders not selling to GSEs. GSEs say the new URAR will not be approprate for non-lender appraisals. Whether or not FHA, VA, and USDA will require UAD 3.6 on November 6, 2026, or sometime in the future is not known now.
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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 1.1 percent from one week earlier
WASHINGTON, D.C. (June 25, 2025) — Mortgage applications increased 1.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 20, 2025. This week’s results include an adjustment for the Juneteenth holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 1.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 10 percent compared with the previous week. The Refinance Index increased 3 percent from the previous week and was 29 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 0.4 percent from one week earlier. The unadjusted Purchase Index decreased 11 percent compared with the previous week and was 12 percent higher than the same week one year ago.
“The combination of the ongoing conflict in the Middle East, current economic conditions, and last week’s FOMC meeting resulted in slightly lower Treasury rates. However, mortgage rates still edged higher but remained in the same narrow range, with the 30-year fixed rate increasing to 6.88 percent last week,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Applications increased slightly overall driven by FHA refinances, but conventional applications saw declines over the week. The average loan size for purchase applications declined to $436,300, the lowest level since January 2025, driven by decreasing conventional purchase loan sizes.”
The refinance share of mortgage activity increased to 38.4 percent of total applications from 37.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.9 percent of total applications.
The FHA share of total applications increased to 19.3 percent from 17.8 percent the week prior. The VA share of total applications decreased to 11.7 percent from 12.1 percent the week prior. The USDA share of total applications decreased to 0.5 percent from 0.6 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) increased to 6.88 percent from 6.84 percent, with points decreasing to 0.63 from 0.66 (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 6.88 percent from 6.81 percent, with points decreasing to 0.60 from 0.63 (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 6.59 percent from 6.57 percent, with points decreasing to 0.85 from 0.90 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.11 percent from 6.14 percent, with points increasing to 0.74 from 0.70 (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 6.16 percent from 6.10 percent, with points decreasing to 0.54 from 0.57 (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.
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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
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