Appraisal News and Business Tips

real estate market

10-25-18 Newz// Maps streets-buildings – Warming Oceans – Actionable Education

A Map of every building in America

Excerpts: Classic maps answer questions like: How do I get from Point A to Point B? These data images, instead, evoke questions – sometimes, simply: What’s that?

We found fascinating patterns in the arrangements of buildings. Traditional road maps highlight streets and highways; here they show up as a linear absence.

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In the August 8 2018 issue of this email newsletter, I published the link

Visualizing the Hidden ‘Logic’ of Cities

Excerpt: Some cities’ roads follow regimented grids. Others twist and turn. See it all on one chart.

Excerpt: In Chicago or Beijing, any given street is likely to take you north, south, east, or west. But good luck following the compass in Rome or Boston, where streets grew up organically and seemingly twist and turn at random.

Fascinating!! Check it out at:
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10-19-18 Newz: ;Beach House Survives – FHA Appraisal Problems – Buy This Book!

Among the Ruins of Mexico Beach Stands One House, Built ‘for the Big One’

Excerpts: The elevated house that the owners call the Sand Palace, on 36th Street in Mexico Beach, Fla., came through Hurricane Michael almost unscathed…

As they built their dream house last year on the shimmering sands of the Gulf of Mexico, Russell King and his nephew, Dr. Lebron Lackey, painstakingly documented every detail of the elevated construction, from the 40-foot pilings buried into the ground to the types of screws drilled into the walls. They picked gleaming paints from … a palette of shore colors, chose salt-tolerant species to plant in the beach dunes and christened their creation the Sand Palace of Mexico Beach.

Very interesting. Worth reading. The aerial photos of the beach are striking – one intact beach house left.
For lots more info, photos and videos, google Sand Palace of Mexico Beach

My comment: I am so glad I live on the Left Coast. Most of it is elevated, with the beaches at water level. Plus, no big areas of rivers and streams draining into the ocean causing flooding. Much colder ocean than the East Coast. Of course, for us the Big One is a major earthquake, which I try not to think about ;>
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Mortgage-industry layoffs are picking up

Excerpt: JPMorgan Chase & Co. and Movement Mortgage this month were the latest companies to announce layoffs of hundreds of mortgage workers due to a downturn in business. Many more people in the industry can expect to lose their jobs in the coming months, Fannie Mae says.

“I do believe you will see more layoffs,” Fannie’s chief economist, Doug Duncan, said during a telephone interview. Hiring in the mortgage business has traditionally been boom and bust. Companies add staff during refinance booms and then lay off workers when the rates tick up. Given the cost to hire and fire people, the companies tend to wait and see if the downturn is permanent, Duncan said. There is usually a six-month lag before the layoffs pick up steam.

That time has arrived, Duncan said.

 “We are at the beginning of that I would say,” he said. “It is a cyclical business and it is driven by the cyclical behavior of interest rates. So, none of that should be a surprise to anyone. The only thing different in this cycle was that it was policy that drove rates, so they were so low for so long.”

https://www.scotsmanguide.com/News/2018/10/Mortgage-industry-layoffs-are-picking-up/

My comment: Looks like appraisers are finally thinking about doing non-lender work. An ad for my paid newsletter was sent out by workingre today, with twice the number of new subscribers as compared with the typical response. Appraising is cyclical as it depends on mortgage lending…
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10-4-18// Newz: ;Pyramid House – Comp Sharing? – “Prove” adjustments?

Malibu Pyramid House in 3-D and Drone View

Just For Fun!!

27553 Pacific Coast Hwy, Malibu, CA
Price: $5,695,000
Why it’s here: Here’s your prime directive: Live in the futuristic home as seen on season 3 of “Star Trek: The Next Generation.” Designed by Ellis David Gelman, the well-maintained and playful space features “four eclectic bedrooms,” an ocean-view terrace, and lavender and rose gardens spread over 2 acres.

See it in 3-D, Drone view, and lotsa photos here!!
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Is a la mode’s Smart Exchange Really a Smart Idea?

Excerpt: Alamode recently launched Smart Exchange to its users. The idea is appraisers can see what others have stated as property characteristics and transfer that information directly into your report. The system is based on mutual sharing, so if you participate, you will share all your comparable data with everyone else that is using Smart Exchange and you can see their data.

Lots more info plus appraiser comments at:

My comment: I have never used a la mode software, but do follow the Yahoo Group WinTOTAL. Lots of discussion there also. Of course, I am suspicious because Corelogic owns a la mode.

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9-27-18 Newz//Two Appraiser Brains? -Fannie Waivers – Frank Lloyd Wright Homes

Do You Have Two Appraiser Brains?

By George Dell
Excerpt: One appraiser brain says you must be “independent, impartial, and objective.” (USPAP) It wants to be good. It wants integrity and to sleep peacefully at night.

But there’s another brain. It’s primal and wants to survive. It has other responsibilities: meet the bills, feed the family, pay the mortgage, and pay government taxes/fees. And recorded in this brain is that part of the standards which say: Do what your clients expect; do what everyone else does. As paraphrased, the sole guides to an acceptable scope of work.

Worth reading. Short. Plus the comments.
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7 Fantastic Frank Lloyd Wright Homes

Excerpt: Dubbed by the American Institute of Architects as the “greatest American architect of all time,” Wright designed more than 1,100 buildings, 532 of which were eventually built. From his early designs in the low-slung Prairie School style to the efficient, affordable Usonian style inspired by the Great Depression, everything Wright created aimed to create spaces that he described as “eloquent and humane.”
Photos and info at:

https://www.realtor.com/news/trends/frank-lloyd-wright-homes-on-the-market

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9-20-18 Newz// Zillow Addicts – Pyramid House – Favorite Podcasts

Unusual pyramid house in Malibu takes its cues from the sun and moon

Excerpt: This one-of-a-kind residence looks like it belongs in the swirling sands of Giza rather than on a hilltop in Malibu. The three-bedroom house was designed for two astronomy photographers and built to face the magnetic north like the needle of a compass. Sitting on one of the highest points in the Santa Monica Mountains, it has perfect vantage for observing the ocean as well as the movements of the sun and moon.

Read more and see the fotos plus video!! Currently listed for $2,999,000. Has been on the market for awhile.
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9-13-18 Newz// Disasters – Working Together – Nonbank lender risk

When a Disaster Strikes, Are You Prepared?

By Bruce Ford
Excerpt: In 2017, California experienced the most destructive wildfire season on record. There were over 9,000 fires that burned covering 1,381,405 acres. The fires destroyed anything in its path. Damaging more than 10,000 structures and resulting in over 40 causalities.

The author, Bruce J. Ford, Chief Appraiser of NorCal Quality Appraisals and California native… collaborated with other appraisers in the area to help those in need.

Read this article for lots more info:

My comment: Disasters can occur anywhere, any time. Fire, flood, hurricanes, etc. In my area, the 1989 earthquake and the 1991 Oakland firestorm were the most recent. I will never forget driving by all the remaining fireplaces trying to find the properties I had appraised to see which were gone. It was very, very sad. Now, I really worry about the failure to do much about the large amount of trees and brush that are a significant fire hazard in the Oakland/Berkeley hills and many other Bay Area cities.

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9-6-18 Newz//School Premiums – Cabin Fever – Appraiser Diversity

Where Are the Largest Public School Real Estate Premiums in U.S.?

Excerpt: Coastal cities and their suburbs dominated the California list, with America’s most expensive prime public school areas dotting California-from the mansion-speckled towns around Silicon Valley to the affluent school district of Rancho Santa Fe, outside of San Diego.

Note:  This article focuses on California, Washington state and New York city.

Click here to see a map of the school ratings where you appraise, used to live, live now, etc. Definitely accurate for my city. Yes, being in some districts make a difference in value… Fascinating!!

https://www.greatschools.org/

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8-16-18 Newz//Market starting to tank? ;Unusual Homes ;Public Trust Failed?

Bye-bye 1004MC, Hello Analysis

By Rachel Massey, SRA, AI-RRS
Excerpt: What does this mean to the residential practitioner operating in the mortgage space? It means that the requirement for analyzing the market remains, and it is now up to the practitioner to support their opinion, without the benefit of a flawed format. Appraisers can now choose how they present their analysis, which may include multiple sources to support an opinion. Fannie Mae is clear that the one-unit housing trends section should reflect properties that are directly competitive with the property being appraised. The following information relates to several different ways to support trends, but is not an exhaustive list.

Read the full article here:

My comment: FHA and VA still require 1004mc, plus some lenders and AMCs. Freddie is expected to drop the requirement.
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8-2-18 Newz .1004MC dropped, Treasury Proposes Appraisal Downsizing, Rural Appraisals

No more 1004MC for Fannie appraisals

Date: 7/30/18 1:46
My note: This was posted in an appraiser yahoo email discussion group I have subscribed to since it started awhile ago. The person who sent it is very reliable. I have known him personally for many years. Below is the email. When I used to travel a lot to appraisal conferences, sometimes Fannie would make comments on significant changes. This was one of those comments. When I speak I am a lot more candid than when I write for unknown reasons. Maybe Fannie speakers do the same sometimes.
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Posted discussion group message:
“I’m in Nashville at the National Appraisal Institute Conference. I just left a presentation given by the collateral policy managers at Fannie Mae and Freddie Mac.”

The Fannie spokesperson said that Fannie Mae has decided not to make the 1004MC a required from anymore; the change will be effective as of the new Selling Guide update, which is expected to come out next week.

I asked Freddie if they planned to drop the requirement as well? They said they had considered dropping it when the new reporting formats were finalized, but also said in light of Fannie’s announcement, they may not wait until the form-changes and adopt that decision sooner.

The Fannie spokesperson said that just because Fannie won’t requirement doesn’t mean a lender might not still want it. So, she warned not to expect all lenders to adopt the change instantly.

In my opinion, I think most lenders will opt out of the 1004mc form, but will require something else (data/analysis) in the report to support the market condition identification and adjustments (if warranted). So I don’t anticipate the need for market condition analyses to go away (and it shouldn’t, in my opinion) but I do anticipate more flexibility in the manner we (individual appraisers) want to present that data.”

What I think about 1004MC: The 1004MC forced appraisers to make market conditions adjustments, which lenders had to accept. When I started my appraisal business in 1986, I was told by local, well respected appraisers that lenders “did not want any time adjustments.” Apparently this had been going on for many years. During price declines in the 1990s, I personally knew appraisers who went out of business because they refused to not make time adjustments. All my lender clients allowed them or they were off my approved client list.

I started appraising in the 1970s at assessor’s offices. We were making 2% per month time adjustments. Guess I just got “bad training” for lender appraisals ;>

Appraiser comments: Of course, there were lots of appraiser comments. Dave Towne’s are below:
~1 Lenders and AMC’s (and the other gov’t agencies) won’t back down on requiring the 1004MC form in reports. So you will have to do it, regardless of what the GSE’s do.

~2 Some report users may design their own market conditions reporting form, and demand its inclusion in reports per their own assignment conditions.(One no-longer-in business-by that-name AMC did this in 2008, and demanded their form be included even after the MC form became mandated – until appraisers loudly complained.) These may not be acceptable to other lenders/users. So we could have a situation where multiple users have different forms required, which will greatly complicate completion of reports in a timely manner.

~3 The several report software providers may design something to replace the MC form, which you could then be used in reports. But if 4 (or more) different ones exist, the same situation as in #3 will occur.

~4 The GSE’s may have another form already prepared to replace the MC Form and will demand it be used instead. (By the way….”new appraisal report forms” to replace the current ones are nowhere ready to be released, at least from what the GSE’s have said in the past couple of months.)

~5 Smart, and well versed, appraisers will continue to provide supportable documents and analysis to show market trend activity – which they’ve already been including in reports as a substitute to the MC form. Appraisers who have not been doing this should take steps to learn how to document subject/comparable market trends that are specific to each assignment, and not just a regurgitation of ‘regional’ or ‘national’ trends data reported by others that may not directly apply to the appraisal assignment.

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7-5-18 Newz//Busy or Not?, Prices Dropping, Appraiser Hot Dog Stand

Who’s busy and who’s not?

Varies widely around the country. Maybe it depends on housing affordability? See articles below. But, it is really hard to say what causes the geographic variation for appraisers.

Many areas have seasonal variations, but now we are in the traditionally strong summer months, so it is clearer that some areas have less appraiser work.

How do you tell if it is down? AMCs dropping fees. Fewer emails, phone calls, etc.  Other appraisers complaining.
What about steady to increasing biz? Decent fees, turning down work, etc.

Changes in turn times and fees when biz slows down

Appraisers just don’t seem to understand that AMCs work for lenders and try to do what they want.

Why do AMCs/lenders want faster turn times?
AMCs work for lenders. They are competing on turn times primarily, like they always have. Business is very competitive and is declining.

Value pressure?
Is there more value pressure from some of your AMC clients?
Some lenders want to close as many loans as possible and keep profits from dropping.

Why do AMCs drop fees?
Direct lenders have their own fee panels don’t send out bid request to lots and lots of appraisers. Their fees don’t change dramatically. They have never focused on changing appraisal fees frequently. AMCs need lower appraisal fees to keep their profits up, just like you do. I have always thought of AMCs as very large appraisal companies that mostly fee out all their appraisals.

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