Jonathan Miller’s Feb. 5 great comments on Miller-Samuel Housing NotesA few of the topics:
– Repo Man Flipping Out In Housing’s Waves – 1 hour and 46 minutes recording of a Bloomberg interview with Miller. Appraisal related discussion starts at about 1 hour, 6 minutes.
– Deja Vu All Over Again? Big meeting with lenders and borrowers. Credit issues, deceived borrowers, etc. Miller was the moderator.
– Flint Water Crisis – includes Sacramento CA appraiser Ryan Lundquists blog interview with a Flint real estate agents – lenders don’t want to lend
My comment: I can’t wait to see what Miller says about the Superbowl ads!!
Check it out at:
http://www.millersamuel.com/note/february-5-2016/?goal=0_69c077008e-4f154d8430-111272681
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New Trouble Knocks Flint as Mortgage Firms Require Proof of Safe Water
Lenders say they won’t give mortgages unless buyers offer proof of safe water
Excerpt:
The severity of the Flint, Michigan, water crisis continues to plague residents, who now have to deal with the possibility that buyers won’t be able to secure home loans in the area, an article in The Wall Street Journal by Joe Light said.
http://www.housingwire.com/articles/36212-flint-water-crisis-now-impacts-mortgage-lending
My comment: I am hearing from appraisers that some lenders want proof of safe water in other places. More Scope Creep. Can’t tell by looking at it. Has to be tested.
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FHA water quality notices
Thanks to James Shoe for these links!!
FHA with a notice about concerns they have for water contamination, especially in Genesse County (Flint Michigan). They provided a link to their Knowledge Base FAQ http://portal.hud.gov/hudportal/HUD?src=/FHAFAQ
The article specifically addressing Flint is found at http://hudgov.prod.parature.com/link/portal/57345/57355/Article/8684/Does-FHA-have-any-policies-requiring-water-testing-in-Flint-Michigan-and-its-surrounding-areas
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3 ways price per sq ft is valuable in real estate (even for appraisers) From Ryan Lundquist’s blog. He writes for real estate agents, but some of his posts apply to appraisers also.
Excerpts:
My name is Ryan and I use price per sq ft in real estate. There it is. My confession. Are you surprised? I know you’ve heard me talk about how price per sq ft is one of the most abused metrics out there. I still believe that. Yet there are several ways price per sq ft is actually valuable and useful for real estate professionals (even appraisers). So let’s kick around some ideas together below.
1) Price Per Sq Ft Helps Us See the Entire Market: What have buyers been willing to pay in a neighborhood? It’s valuable to see the price per sq ft spectrum to help answer this question. What is the high, the low, and the average? I ran a CMA of sales over the past 90 days in the Mather neighborhood in Sacramento County (a tract subdivision), and the price per sq ft range is $112 to $206
Appraiser application: Sometimes appraisers mock price per sq ft and treat it like a meaningless metric, but there is actually some real value in using it. Not only can we get a more detailed sense of the market, but we can also communicate well with clients. Consider paying close attention to competitive price per sq ft figures (I know, this may not work in rural markets). If you are coming in lower or higher than the competitive range in the neighborhood, just be sure you know why and can explain why. Also, consider using price per sq ft figures in your final reconciliation. For instance, along with statements about comps, I regularly find myself saying things like: “The final value is also supported by trend graphs as well as competitive price per sq ft figures in the neighborhood.”
Click here to read the other two reasons and the comments.
http://sacramentoappraisalblog.com/2016/02/08/3-ways-price-per-sq-ft-is-valuable-in-real-estate-even-for-appraisers
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Adjustments – what to do or not to do?
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New in the FEBRUARY 2016 issue of the paid Appraisal Today
– Adjustments Part 1 – Are you making too many adjustments? Lots of ideas, research, etc.
– Support vs. proof for adjustments by Bob Keith. A very good explanation of Scope Creep on adjustments. He is the former Executive Director
of the Oregon State Appraisal Board and is a consultant for appraisers with state board complaints
– Identifying Residential Architectural Styles by Mark Nadeau,SRA, Book review. Read my review to decide if you want to buy the book.
– Two good, practical residential books, with very good tips on adjustments Book reviews.
– The Dictionary of Real Estate Appraisal, 6th Edition – Read my review to decide if you want to buy this book.
Coming in the March 2016 issue:
– Adjustments Part 2 – what adjustment methods do you want to use. There are well over 20 methods.
– How to use your Web site to get non-lender work. The easiest marketing method, by far!! I get half of my non-lender work from my Web site.
Cancel at any time. For any reason!!
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Quicken loan Superbowl Rocket Mortgage ad – Tweet-O-Mania!!
Excerpt:
Social media quickly blew up with comments from people convinced Quicken’s product will usher in a second housing crisis by lending to unqualified borrowers. And then the Consumer Financial Protection Bureau joined in.
The CFPB’s tweet – which was posted shortly after the Rocket Mortgage commercial aired, but doesn’t expressly refer to Quicken Loans or the Super Bowl – implicitly warns consumers to be wary of technology in the mortgage application process.
Given that the CFPB has been aggressively pushing a paperless agenda, the response highlights the cognitive dissonance in the messages it and other regulators send to the mortgage industry about how and when to use technology.
See the ad and some of the tweets here:
http://www.nationalmortgagenews.com/news/voices/quicken-renews-debate-over-how-fast-is-too-fast-to-get-a-mortgage-1071520-1.html
More commentary in this link:
Quicken Loans Super Bowl ad strikes wrong nerve with Twitteratti and journalists Why let the facts get in the way of fun?
http://www.housingwire.com/blogs/1-rewired/post/36230-quicken-loans-super-bowl-ad-strikes-wrong-nerve-with-twitteratti-and-journalists
My comment: I watched the Quicken loans ad. Seemed ok to me. For decades, lots of people have been saying “why does a mortgage loan take weeks or months and I can go to an auto dealership and drive out with an expensive car in an 1-2 hours?”
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Super Bowl 50: A Housing Highlight Reel contrasts between 1966 and 2016 in Charlotte NC and Denver C
Excerpt:
Census number-crunchers rounded up a collection of facts comparing life back in 1967 to present-day. The play-by-play includes housing stats.
Here are a few stats:
In 1966, The U.S. population was 197.5 million.
The median sales price of a new, single-family home was just $22,700.
In 2016, The U.S. population is 322.8 million-up 63 percent from 1967.The median sales price of a new, single-family home is $282,800.
I shoulda bought something in 1966!! Check it all out and see stats for Charlotte, NC and Denver.
http://blog.rismedia.com/2016/super-bowl-50-a-housing-highlight-reel/ ok
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10 Things to Know About Commercial Real Estate Appraisal
Comments by Douglas McKnight, a 22-year veteran commercial real estate appraiser. Written for small business owners.
Excerpt:
Small business owners have a lot to digest when it comes to the subject of commercial real estate-especially these days. That goes double for the notion of obtaining an appraisal on a piece of commercial real estate, a process that can differ quite a bit from appraisals done for residential properties. “Commercial is very different from residential in the fact that appraisals are much more subjective in nature,” says Scott Everett, founder and president of Supreme Lending, a mortgage lender in Dallas. “Much of the value derived from a commercial building is based on the rental rates received relative to the expenses paid out. The underlying asset is important, but not even close to the same way that a residential properties value assets.”
Don’t miss the comments. Originally published in May, 2011. Not much has changed since then for small commercial properties except that loans are a bit easier to obtain. Dramatically different appraisal requirements from residential AMC Scope Creep mania!!
http://www.inc.com/guides/201105/10-things-about-commercial-real-estate-appraisal.html
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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, go to www.mbaa.org
Note: I publish a graph of this data every month in my printed newsletter, Appraisal Today. For more information or get a FREE sample issue go to www.appraisaltoday.com/products.htm or send an email to info@appraisaltoday.com . Or call 800-839-0227, MTW 8AM to noon, Pacific time.
Mortgage applications increased 9.3 percent from one week earlier
WASHINGTON, D.C. (February 10, 2016) – Mortgage applications increased 9.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 5, 2016.
The Market Composite Index, a measure of mortgage loan application volume, increased 9.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 12 percent compared with the previous week. The Refinance Index increased 16 percent from the previous week. The seasonally adjusted Purchase Index increased 0.2 percent from one week earlier. The unadjusted Purchase Index increased 7 percent compared with the previous week and was 25 percent higher than the same week one year ago
The refinance share of mortgage activity increased to 61.2 percent of total applications from 59.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.4 percent of total applications
The FHA share of total applications decreased to 12.3 percent from 12.9 percent the week prior. The VA share of total applications remained unchanged from 11.1 percent the week prior. The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to its lowest level since April 2015, 3.91 percent, from 3.97 percent, with points unchanged at 0.41 (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 $417,000) decreased to its lowest level since April 2013, 3.76 percent, from 3.84 percent, with points increasing to 0.30 from 0.26 (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 its lowest level since May 2015, 3.72 percent, from 3.80 percent, with points decreasing to 0.33 from 0.35 (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 decreased to its lowest level since April 2015, 3.18 percent, from 3.22 percent, with points increasing to 0.38 from 0.37 (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 decreased to its lowest level since October 2015, 2.96 percent, from 3.00 percent, with points decreasing to 0.30 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate decreased 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.
