Newz: NAR Calls Out Unregulated Middlemen (AMCs), Modular Construction?
October 10, 2025
What’s in This Newsletter (In Order, Scroll Down)
- LIA AD: Dealing with Unhappy Buyers as an Appraiser
- Condo prices are obviously dropping, By Ryan Lundquist
- Foreclosure Fixer-Uppers Ready for Their Next Chapter: 5 Abandoned Homes Offering a Bargain Deal to Buyers
- The Modular Construction Revolution That Hasn’t Happened (Yet)
By Ivan Rupnik
- NAR Calls Out Unregulated Middlemen: A Wake-Up Call for FHFA
- When Appraisers Rally: Korea Sends the U.S. a Wake-Up Call
- MBA Mortgage applications decreased 4.7 percent from one week earlier,
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Condo prices are obviously dropping
By Ryan Lundquist
Excerpts: So many price graphs right now look pretty flat, but this condo scatter graph shows definitive declines, right? This is stunning to see, but it’s also not a shocker since the condo market has been hit harder over the past couple of years. Keep in mind I’m showing the entire county, and not every single subdivision will have the exact trend.
WHAT’S HAPPENING WITH CONDOS?
Buyers have been turned off lately with condos, and so much of it has to do with HOA fees rising and affecting purchasing power (see paragraph below). There can also be issues with obtaining financing. Moreover, SB326 is a new balcony law in California in 2025, and that’s also something we want to keep watching. Yet, the declines began before 2025, so don’t blame SB326 alone.
LOSING PURCHASING POWER IS A BIG PROBLEM – SEE GRAPHIC BELOW
Check out the huge difference in purchasing power between the following two properties. The monthly payment is the same for a $350K condo with a $600 monthly HOA fee and a $450K detached home without an HOA fee. While there is some advantage in having the HOA cover exterior maintenance or even having a gym on site, buyers are looking at the math, and the higher fee has been a roadblock for condos.
SUPPLY HAS GROWN FASTER WITH CONDOS
Condo supply has been growing at a faster pace all year than the detached market in Sacramento County. This is a good reminder that not all parts of the market are experiencing the same trend (key point). No wonder why prices have gone down at a quicker rate for condos, right?
To read more, Click Here
My comments: What’s happening in your market??
Over my 40 years appraising in my local market, condo markets are almost always different than the market for detached homes.
Many condos in my city are conversions of apartments built prior to 1970. Today, there are new condos are being built here and all over the Bay Area due to very high land prices. Across the street from my office are many 3-5 story new condos with a few attached townhomes. They are sorta boring and look the same. A marina is being converted to residential mostly. I had my business there for over 30 years and had to move as my office building was destroyed in the first year of Covid.
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Foreclosure Fixer-Uppers Ready for Their Next Chapter: 5 Abandoned Homes Offering a Bargain Deal to Buyers
Excerpts: When a listing says a property is being foreclosed on, some buyers see it as a red flag—but savvy investors know that it can actually be a sign of opportunity to capitalize on a potential deal.
A foreclosure simply means the a buyer was unable to pay the mortgage, so the lender took over ownership of the property and is now trying to sell it.
Because banks are often eager to unload these foreclosure properties, they are typically not looking to make a large profit on the sale, but rather break even with an asking price that is most often the sum of the remaining mortgage, plus interest, lawyer fees, and penalties.
On average, this ends up totaling about 15% below the home’s actual value—and if you want to buy a foreclosure, you’ll find it often sells for less than asking price.
There are certainly many things to take into consideration when buying a foreclosed property. With proper research, you will be able to find out how long the property has sat vacant and whether there is any structural damage or significant interior issues like mold requiring attention.
One of the best ways to ensure what you are in for is to add an inspection contingency to the purchase and sale agreement and hire a professional home inspector who will be able to pinpoint major repairs.
LISTING INFO FOR THE PHOTO ABOVE
Number 1. 2010 E Pinecrest Rd, Spokane, WA
Price: $869,000
2 bedroom, 3 bath 3,050 sq.ft. 0.28 acre lot, built in 1994
Storybook-inspired brick castle: At first glance, it is unclear how long this stone-and-brick residence designed by architect Glen Cloninger has not been lived in, but buyers are expected to do their due diligence to find out more.
Built in 1994, the 3,050-square-foot home boasts just two bedrooms along with an office that could easily be converted into a third bedroom. A “chef-worthy” kitchen offers maple cabinetry, stone countertops, and modern appliances.
French doors upstairs open up to a primary suite with fireplace, steam shower, and soaking tub. A sauna can be found on the lower level. There is also a brick patio with fire pit designed for entertaining and a three-car garage.
The property originally hit the market in August 2024 for $1,299,990 and was last sold in 1998 for $165,000.
To read the listing for the home above, Click Here
To read about more foreclosed homes, Click Here
My comments: Written for buyers and sellers but worthwhile reading for appraisers. I have appraised many fixer uppers for estates, always “as is” – never made any assumptions that it is fixed up. I use three different levels: needs cosmetic work and some fix up, usable for rental. Needs kitchen and bath – more work before occupying. Contractor Special – not livable and needs major repairs.
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The Modular Construction Revolution That Hasn’t Happened (Yet)
By Ivan Rupnik
Ivan Rupnik, an architectural and urban design researcher, wants to demolish our assumptions about modular home construction.
There’s a housing shortage in the U.S., and it’s fueling an affordability crisis. Labor and material costs have risen. And restrictive zoning, land use regulations, and building codes make it costly, or even impossible in some places, to build new homes.
Humphreys: What would you like to see happen in the U.S. home construction industry over the next ten years? What should appraisers be watching for?
Rupnik: I think we’re seeing it. The ten largest production builders are all looking at how they can incorporate offsite construction into their existing business model or even a new business model. We’re seeing startups trying to create the kind of brand recognition that I think an appraiser would appreciate.
Humphreys: Do you see an opportunity for appraisers in this evolving field?
Rupnik: The most significant opportunity I see for appraisers is to get educated about offsite construction. What are its strengths and weaknesses? Visit a factory. Watch the assembly process. I’d also like to see appraisers be even more demanding of the “bones” of a building. A factory process often results in better bones, but those bones are covered up by the time of an appraisal. The quality is more easily understood in the factory and at the construction site.
Bottom line: Issues from the 1960s and 70s are now worse. Less material. Less labor. So going forward, some form of prefabrication and pre-design will be necessary. We don’t have an alternative. And MOD X would welcome the opportunity to share what we’ve learned with the appraisal community in more detail through one of our in-country Exchanges.
To read more, Click Here
My comments: Modular homes can definitely help with the lack of affordable homes in many areas. My brother lived in Middletown in Lake County about 2 hour drive north of San Francisco. Modular homes are allowed there. Many homes and commercial properties were destroyed in a major fire. The new replacement homes near the downtown commercial properties were modular and were set up very quickly. In other nearby areas areas with more expensive custom homes that were destroyed and were rebuilt. Few modular were used and it took much longer to rebuild the custom homes.
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How much insurance do you need?
In the August 2024 issue of Appraisal Today
Insurance is financial risk management. You shift the risk from yourself to
your insurance company.
Business is slow for most appraisers now, so we are looking for ways to cut costs. The amount of insurance you have is a trade-off between the cost and probability of needing the insurance. No one has coverage for every possible loss. If you don’t have insurance for a risk, you are self-insuring, where you are assuming all the financial responsibility.
How much personal insurance should you have?
Most experts agree that life, health, long-term disability, and auto insurance
are the four types of insurance you must have. Most appraisers have homeowners and health insurance. Auto, health, and life insurance are discussed in this article.
Health insurance
There are few young appraisers now. The older you are, the more likely to
have health problems. Fortunately, Medicare has reduced the risk for 65 and older persons.
Your health status is the most important factor for many of us and our
families, way beyond an auto accident. As we all know, over time most of us need medical treatments, including surgery. If you have cancer and need surgery plus chemotherapy and other treatments, the cost can get very high.
I’m always surprised how many appraisers don’t have good health
insurance. One of your greatest financial risks is a major health problem requiring surgery. Also, the number of people with medical debt is very high now, even for those with health insurance.
A few years ago I had major abdominal surgery with 5 days in the hospital. If not insured, the cost would have been hundreds of thousands of dollars. I paid under $500 for the hospital room and a few hundred dollars for other fees. I am on Medicare. If not insured, it would have cost most of my retirement IRA and maybe selling my house and buying a lower priced home in another area. Median home price where I live is well over $1,00,000.
To read the full article, plus 3+ years of previous issues, subscribe to the paid Appraisal Today at www.appraisaltoday.com/order .
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NAR Calls Out Unregulated Middlemen: A Wake-Up Call for FHFA
by AppraisersBlogs
Excerpts: When unregulated middlemen run the show, appraisers get ghosted, consumers get duped, and regulators get a velvet-gloved slap from NAR.
In a housing market that demands clarity, Appraisal Management Companies, or AMCs, continue to operate like the magician’s assistant, always present, rarely transparent, and somehow still part of the act. But the National Association of REALTORS® (NAR) just handed the Federal Housing Finance Agency (FHFA) a letter that reads less like a polite memo and more like a velvet-gloved slap. It’s a bold call to rein in AMC antics and restore dignity to the appraisers who keep the system honest.
Then there’s the fee fiasco. Ever tried decoding the appraisal charge on a closing disclosure? It’s like trying to figure out how much of your restaurant bill went to the chef versus the guy who handed you the menu. AMCs bundle their cut with the appraiser’s fee, leaving consumers in the dark and appraisers underpaid. NAR wants those fees unbundled and tracked through the new UAD 3.6 system, which could finally shine a light on who’s getting paid and who’s getting played.
The letter doesn’t stop at finger-pointing. It urges FHFA and the GSEs to treat AMCs with the same scrutiny they apply to mortgage insurers and seller servicers. It’s a call for fairness, transparency, and a little common sense. Appraisers aren’t asking for a parade. They’re asking for clear communication, fair compensation, and the freedom to do their jobs without AMC interference. If AMCs can’t meet that standard, maybe it’s time regulators stopped treating them like essential middlemen and started treating them like the unregulated middlemen they’ve become.
To read more and the NAR letter, Click Here
My comments: NAR finally steps up to support appraisers. Appraisers are fragmented with no organization to speak for them. NAR has a lot of clout. Thanks to NAR! I have been an NAR member for 40 years.
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When Appraisers Rally: Korea Sends the U.S. a Wake-Up Call
by AppraisersBlogs
Excerpts: In Seoul, appraisers didn’t write op-eds. They didn’t file quiet complaints. They rallied. And Korea took notice.
On September 29, the Korea Association of Property Appraisers (KAPA) staged a public protest outside KB Kookmin Bank’s headquarters, condemning the bank’s in-house collateral valuations as illegal under Korea’s Appraisal Act. The Ministry of Land had already ruled the practice unlawful, yet banks continued hiring internal appraisers to fast-track high-value loans. KAPA’s response? Signs, speeches, and a full-throated demand for accountability.
Meanwhile, in the United States, appraisers face a quieter, but no less existential, threat. Not just from the GSEs, but from banks and financial institutions that increasingly favor speed over scrutiny. Traditional appraisals are being replaced by automated valuation models, broker price opinions, and hybrid products, cheaper, faster, and often less reliable.
This isn’t modernization. It’s marginalization.
The irony? Korean appraisers are protesting banks for doing what U.S. institutions, public and private, are institutionalizing. In Korea, the government ruled in-house valuations illegal. In the U.S., they’re being rebranded as “appraisal modernization” and quietly embedded into underwriting algorithms.
And while Korea’s appraisers rallied, U.S. appraisers are watching their profession erode, one waiver, one AVM, one BPO at a time. The shift is accelerating, and without resistance, the damage may soon be irreversible.
To read more, Click Here
My comments: Excellent book for other countries: Real Estate Valuation in Global Markets, Second Edition (2011): This book offers a comprehensive overview of real estate valuation in many countries, compiled from on-the-ground information from local experts. Available from the Appraisal Institute and Amazon. I read an earlier fascinating edition many years ago. I need to read this one to find out what has changed.
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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 decreased 4.7 percent from one week earlier,
WASHINGTON, D.C. October 8, 2025) — Mortgage applications decreased 4.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 3, 2025.
The Market Composite Index, a measure of mortgage loan application volume, decreased 4.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week and was 18 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 14 percent higher than the same week one year ago.
“With mortgage rates on fixed-rate loans little changed last week, refinance application activity generally declined, with the exception of a modest increase for FHA refinance applications,” said Mike Fratantoni, MBA’s SVP and Chief Economist “Refinance volume remains somewhat elevated relative to levels of a month ago. Purchase activity declined by about 1 percent for the week but continues to show moderate growth on an annual basis, and stronger growth for FHA loans, favored by first-time homebuyers.”
Added Fratantoni, “The ARM share increased to 9.5 percent last week from 8.4 percent the prior week. Our survey shows 5/1 ARM rates are averaging almost a percentage point below 30-year fixed rates, and this differential is leading more purchase and refinance applicants to consider ARMs.”
The refinance share of mortgage activity decreased to 53.3 percent of total applications from 55.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 9.5 percent of total applications.
The FHA share of total applications increased to 18.5 percent from 16.8 percent the week prior. The VA share of total applications increased to 16.3 percent from 16.2 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 ($806,500 or less) decreased to 6.43 percent from 6.46 percent, with points decreasing to 0.60 from 0.61 (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 $806,500) increased to 6.60 percent from 6.54 percent, with points increasing to 0.44 from 0.40 (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 decreased to 6.19 percent from 6.24 percent, with points decreasing to 0.73 from 0.76 (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 increased to 5.77 percent from 5.76 percent, with points increasing to 0.79 from 0.68 (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 5.49 percent from 5.74 percent, with points increasing to 0.74 from 0.46 (including the origination fee) for 80 percent LTV loans. The effective rate decreased 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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