Castles in America
My comment: Very interesting article with good photos plus some info on castles in Europe for comparison. FYI – article is in the New York Times, which only allows a few free articles before requiring a subscription.
Cherry-picking comps & being connected to the neighborhood
My comments: Lots of good ideas. Very well written with good analysis and excellent use of graphs and annotated maps. I regularly go back in the past for comps and analysis. Making market conditions adjustments is very easy. I also use percent adjustments, which tend to be stable over time.
Beautiful airports and Victorians under $200,000
Unique and Beautiful Airports Around the World
Architecture that redefines what it means to travel in style.
All I can say is WoW!! Take a break for a few minutes and look at these photos…
Affordable homes from all over the country (Hint: No fixers)
Just scroll down the pages.
7 Victorians under $200,000 (No tiny homes)
8 homes under $100,000 (Hint: no fixers)
My comment: Wow!! Those Victorians in my city would be way over $1,000,000 on lots under 5,000 sq.ft. !!!
Sadly, The Appraisal Institute is now working against its local chapters by Jonathan Miller, posted 12/9/16
Read more!! →
Not much interesting newz this week, so I’m sending some interesting links, sorta appraiser-related – use of “they”, cul-de sacs, street grids and the history of screws;>
Excerpt: Descend from 40,000 feet into just about any major metropolitan airport in the United States, and patterns of the trajectory of American life over the last century become clearly visible. Old urban cores are etched out in tight grids modeled off a sheet of graph paper. Further out, all those neat lines and right angles begin their curling meander into suburbia. Sparsely populated roads loop through the countryside in an odd geometry designed around the residential real estate dream of post-war America: a cul-de-sac for every family.
This is where it’s most apparent – from an airplane window – that American ideas about how to live and build communities have changed dramatically over time. For decades, families fled the dense urban grid for newer types of neighborhoods that felt safer, more private, even pastoral. Through their research, Garrick and colleague Wesley Marshall are now making the argument that we got it all wrong: We’ve really been designing communities that make us drive more, make us less safe, keep us disconnected from one another, and that may even make us less healthy.
My comment: younger people are definitely not doing as much driving, and fewer are getting driver’s licenses, as in the past. I got my driver’s license at 15 ½ like everyone else. The baby boomers are getting older. Suburbia requires having a car. What if you don’t want to drive at night, or don’t want to drive much any more? As an appraiser I used to drive a lot. Now I just don’t want to drive for many hours a day. Of course, there is a lot of traffic now that the recession is behind us and everyone is driving again.
The Linguistic Turf Wars Over the Singular ‘They’
It could be close to mainstream acceptance.
Excerpt: Of all the turf wars that have complicated the landscape of grammar over the past few hundred years, the most complicated and frustrating may be that of the singular they.
It may be the most controversial word use in the English language-because it highlights a hole where a better-fitting word should go.
It creates a conflict between writers and editors who want things to follow the natural symmetry of Latin, and people who find they the only logical option for referring to a single person without a gender attached.
My comment: Almost everyone who writes anything, including emails, comes across this issue. I do. I have started using they more often, but did not know it was a new trend.
The Screw Heads That Tried, But Failed, to Topple Phillips
The history of the screw is long and surprisingly weird.
Excerpt: The screw is the ultimate example of an object that hides under our noses but we never think about.
It’s the most basic of building blocks, something that connects every one of our devices, manufacturing processes, and likely even the chair you’re sitting in right now. (One device that doesn’t tend to have screws? The air mattress.)
And generally, we never give screws a second thought. But I was thinking about them a lot the other night when I tried to screw a nut around a screw and misaligned it so annoyingly that it took a lot of physical might to unscrew that screw.
Where do screws come from? And what did we do in a world before them? As it turns out, screws have a surprisingly diverse and unexpected history, stretching from ancient Greece to what we think of them as today, essential parts of our literal foundations. In ancient Greece, for example, it’s claimed Archytas of Tarentum invented an early version. Leonardo da Vinci also had one, and, later, of course, it was a key part of the Industrial Revolution.
My comment: Very Interesting, as Usual…
In the October 2016 issue of Appraisal Today
- Fees are going way up!! How to get higher appraisal fees during this boom time!! By Ann O’Rourke, MAI, SRA, PDQ and Doug Smith, SRA, AI-RRS . Lots and lots of practical tips. No one knows when the inevitable crash will come. My fees have gone way up.
- Pro Camera 9 – a great photo app for appraisers – only $4.99!! by Wayne Pugh, MAI, SRA – I want it and Love the price…
- USPAP 2017-2019 2nd Exposure Draft – what has changed? Comments due by October 14!! Tell the ASB what you think. Draft reports (again). They keep trying…. And extraordinary assumption and sales history plus some less interesting topics (to me)
An excerpt from Advisory Opinion 37, Computer Assisted Valuation Tools:
Q: An appraiser used a regression analysis model that suggests a relationship between the size of a residence and the price per square foot of similar residences in a specific market. This relationship has not been confirmed by the actions of market participants. Can the appraiser use the regression analysis as support for the GLA adjustment in the appraisal?
A: No, because the appraiser does not know how 1the regression analysis model works, has not independently tested the conclusions it provides, and has no reason to believe the database is reliable.
Another Q: An appraiser has purchased a software package that has multiple functions, such as market analysis, deriving adjustments for physical characteristics, automatically inputting information from the local MLS, and more.
He uses the program to develop an adjustment for an in-ground pool.
A. No… (They could have used “they” instead of “him”. See above on linguistics and using “they”.)
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UAD absolute vs relative
Another good commentary from Washington appraiser Dave Towne!!
Why is it so many appraisers have trouble with UAD and the CU (Collateral Underwriter), and how to apply the Quality and Condition rating between the Subject and Comps?
Not long after the UAD was implemented/mandated by FNMA (in 2011), and then the CU evaluation system came along, FNMA began discovering that many appraisers were improperly Rating the comps Quality and Condition AGAINST the Subject in the grid. And they began telling appraisers what they were finding. FNMA also discovered, and revealed, that many appraisers were using the same Comps over and over again in different reports, but were using DIFFERENT rating ‘numbers’ for those properties – depending on the Quality and Condition they applied to the SUBJECT.
Applying an ‘opinion’ of the difference for the Quality and Condition is not how we are supposed to do appraisals. Although many appraisers were taught to do that years ago by their mentors, who were also doing it wrong. Unfortunately, FNMA never really said much about it then….until the CU process started. So bad habits started, and were transferred from one appraiser to another, and down the line.
Everything on the grid pages is ABSOLUTE to those properties. The Address, the Site size, View, Design, Actual Age, GLA size, Garage & Carport spaces, etc. Everything. As I like to say – “It is what it is, where it is, when it is.”
Yet many appraisers still think the Rating for Quality and Condition for Comps should be applied Relative-to the Subject. Uh….NO! The Comps are rated what they are, based on the Quality and Condition Rating Definitions that apply with UAD. (And so is the Subject.)
Over the years, I’ve read countless laments by appraisers who say the ‘UAD definitions’ are hard to understand, and don’t have ‘steps’ between the numbers so appraisers can try to engineer precise differences in the ratings and resulting adjustments. That line of thinking is basically hogwash. (If you think you need to make more precise adjustments, you can do so on the extra grid lines…such as ‘Add’l Qual Adj.’ or the same for Cond.
Why do I believe this is so? Let me ask you who believe UAD definitions are so difficult: Before UAD came along, did you ever include definitions of the ‘rating words’ we used back in the dark ages – in your reports? That can be answered 100% no (except by some very elite appraisers). Another question: Where did those ‘rating words’ come from, and can you quickly pull out your reference guide to bring up the definitions for those?. Again, probably 100% no. Before you whine, send me your definitions of Average(+) and Excellent(-), for both Quality and Condition – that you used prior to UAD.
So now we have UAD and the basically easy to use and understand definitions. These, by the way, should be included in every appraisal report – all the software vendors have definition pages to add into reports. Not including these in reports means you have produced a report that is NOT CREDIBLE per USPAP because without those, the reader(s) won’t know what the rating numbers and other codes mean.
Be sure to check out the many comments at:
My comment: I thought this had been figured out by most appraisers many years ago. But, change can be difficult, especially something you have been doing for many years .Of course, if you don’t do work requiring UAD, you can do what you have always done – relative. I love relative!!
What Your Street Grid Reveals About Your City
The surprising ways size and shape can impact a place’s economic productivity and walkability.
Excerpts: New York, of course, is not the only city built on a grid. Similar schemes could be found as far back as ancient Greece and Rome. But Manhattan’s design was the exemplar for what became the default pattern of American cities.
Still, not all grids are created equal. Some shape a walking-friendly streetscape. Others, not so much. Over at the Strong Towns blog, Andrew Price, a software developer by day who blogs about urbanism, has been writing about the math of the grid and what it reveals about a city’s economic productivity and walkability.
My comment: Very interesting article on street grids: math, different layouts, what the patterns mean…
Nonbank Lenders’ Market Share is at a Two-Decade High. Here’s Why
Excerpt: Depositories still dominate home lending, but nondepositories’ market share is the highest it has been in at least two decades.
The nonbank share of total mortgage originations was 42% in 2014, according to an analysis of Home Mortgage Disclosure Act data by ComplianceTech and its LendingPatterns.com tool. Just five years before that, in 2010, nonbanks held only a 27% market share.
One reason for this is that banks’ attraction to mortgages tends to be opportunistic.
“Banks have historically been very fickle about the mortgage lending market,” said Maurice Jordain-Earl, managing director and co-founder of ComplianceTech.
My comment: Ever heard of Quicken Loans? My loan is with them. Lots of appraisers work for their AMC. For appraisers, this means fewer lenders that don’t use AMCs. The non-banks use AMCs.
Another interesting article on non banks: Why Nonbank Lenders Are the Future of Mortgages
In San Francisco, a Tilting Skyscraper and a Deepening Dispute
SAN FRANCISCO – The developers of the luxurious Millennium Tower laid out the risks and potential defects of the 58-story building in minute detail when its apartments went on sale seven years ago.
The Milennium Tower, which its developers say is the largest reinforced concrete building in the western United States, has now sunk about 16 inches and is leaning six inches toward a neighboring skyscraper.
The color and texture of the marble and granite hallways “may not be completely uniform,” said a disclosure statement given to potential buyers. The streets below the tower could be “congested and noisy,” and the landscaping in the common areas could change, subject to availability of certain species of plants.
But the 21-page disclosure document left out what owners of units in the buildings now say was a crucial detail: that the building had already sunk more than eight inches into the soft soil by the time it was completed in 2009, much more than engineers had anticipated.
I just finished my mortgage application volume graph from 1/13 to 9/16 for my paid newsletter. For the first time, it was close to the peak in early 2013 a few weeks ago. That’s why appraisers are so busy. But, why are there so many complaints about high fees and long turn times now? Is is just media hype? Or have more appraisers quit working for AMCs???
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 https://www.mba.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 or send an email to email@example.com . Or call 800-839-0227, MTW 8AM to noon, Pacific time.
WASHINGTON, D.C. (September 28, 2016) – – Mortgage applications decreased 0.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 23, 2016.
The Market Composite Index, a measure of mortgage loan application volume, decreased 0.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The Refinance Index decreased 2 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index remained unchanged from the previous week and was 10 percent higher than the same week one year ago.
The refinance share of mortgage activity decreased to 62.7 percent of total applications from 63.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 4.4 percent of total applications.
The FHA share of total applications remained unchanged at 10.2 percent from the week prior. The VA share of total applications increased to 11.9 percent from 11.6 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 3.66 percent from 3.70 percent, with points decreasing to 0.33 from 0.38 (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 3.64 percent from 3.69 percent, with points decreasing to 0.28 from 0.29 (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 3.52 percent from 3.56 percent, with points decreasing to 0.21 from 0.23 (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 2.95 percent from 2.99 percent, with points increasing to 0.38 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 5/1 ARMs decreased to 2.92 percent from 2.96 percent, with points increasing to 0.40 from 0.26 (including the origination fee) for 80 percent LTV loans. The effective rate increased 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.
Donation Fundraising for Louisiana Appraisers
Thanks (again) to Dave Towne for this info!!
The Louisiana Real Estate Appraisers Coalition (LAREAC) has started a fund raising campaign using PayPal, which will be used to equally provide donated funds to affected appraisers who are suffering as a result of the massive flooding last weekend. PayPal is being used because its administrative fee is less than another more-well-known crowd funding web site.
There are approximately 8-10 presently known appraisers who have had their homes nearly destroyed in the flood.
My comment: last week I wrote about donations to Bill Cobb, whose house was flooded. It is great that this donation method is done also.
8 Colorful Cities that Look Like They Were Designed by Crayola
See the world in a whole new light through these vibrant locales.
Just for Fun!!!
Many cities are known for their distinctive profiles and unique landmarks, but all across the globe there are regions that are landmarks in and of themselves thanks to their insane colorations. From a all-blue town in Spain that is a leftover from a Smurf marketing stunt, to a Venetian island that looks as though it was born of an intense acid trip, some of the most colorful locations in the world aren’t the biggest, just the most eye-popping. Check out eight cities and towns that offer vibrantly colorful views which are just as unforgettable as any big city skyline.
My comment: None are in the U.S. Too conservative I guess…
Great article with lots of photos and comments!!
Collection and Verification of Residential Data in the Sales Comparison Approach
Appraisal Practices Board, Issued June 30, 2016, First Exposure Draft
Deadline for comments is August 12, 2016
The document includes examples for lender and non-lender work plus references to lender requirements. Extensive discussions on scope of work for different types of assignments, such as relocation, individuals, effect of zoning, estates, etc. as well as verification sources, etc. etc.
Example 2 – Client: Conventional Lender Effective Date: January 20, 2015
After the four siblings receive a market value range of $139,000 to $155,000 from the appraiser, they compare this range to a $140,000 cash offer they received from a buyer who was willing to close in one week. The siblings accepted the offer because they were motivated to sell. This new buyer purchases the residence on January 15, 2015, for $140,000 cash and then decides to finance the residence with a conventional loan. In this instance, the client is the lender.
For this assignment, the lender has specific requirements regarding what data points to verify and with whom the appraiser should verity those data points. The lender also has guidelines such as the minimal number of comparable sales the appraisal will report, and a time frame within which those comparables sold. The appraiser accepted the lender’s specific requirements and produced credible assignment results within these parameters. The final opinion of market value was $150,000, with an estimated exposure time of six months.
Every client and assignment condition will have different requirements for how much sales data is collected and how that data is verified. This can include using different sources, using different levels of verification, and concentrating on the verification of different data points. The overall goal for verification is to verify data to a level that is necessary for credible assignment results, not to necessarily verify all data and certainly not to verify all data to the same level. Different levels of verification are acceptable based on assignment conditions, availability of data, and the relevance of each data point.
My comment: Finally the APB has something useful and practical for residential appraisers!! Be sure to read and comment on this 52-page draft. Worthwhile reading. Very comprehensive on this important topic. Discusses lender issues, including CU. I have not read the entire document but plan on reading it very soon.
How Dirt Houses Became Beloved By The Tiny House Movement
Meet the wondrous cob.
Excerpts: It’s likely that earthen homes were among the oldest structures ever built by humanity. There are a few different techniques and many names for a building made mostly of, well, dirt, but the one that’s caught on in this recent revival of the material comes from England: Cob.
See the photo of: Ancient cob high-rise buildings in Shibam, Yemen.
Very interesting and detailed with photos:
8 Spooky New York Places That Should Be in the New Ghostbusters Movie
There’s something strange in these neighborhoods.
Excerpt: Here is one, but you gotta see the photos and the other 7!!
The Morris-Jumel Mansion
On a hill overlooking the Harlem River, the stately Morris-Jumel mansion is not only Manhattan’s oldest home but supposedly one of its most haunted. Its macabre history started after owner Stephen Jumel died in 1832. His wife Eliza was rumored to have had a hand in the death-there was some suspicion afoot that she orchestrated the carriage accident that killed him….
Take a break from typing appraisal reports and check it out!!
The Shrinking of the American Lawn
As houses have gotten bigger, yard sizes have receded. What gives?
The American house is growing. These days, the average new home encompasses 2,500 square feet, about 50 percent more area than the average house in the late 1970s, according to Census data. Compared to the typical house of 40 years ago, today’s likely has another bathroom and an extra bedroom, making it about the same size as the Brady Bunch house, which famously fit two families.
This expansion has come at a cost: the American lawn.
As homes have grown larger, the lots they’re built on have actually gotten smaller-average area is down 13 percent since 1978, to 0.19 acres. That might not seem like a lot, but after adjusting for houses’ bigger footprints, it appears the median yard has shrunk by more than 26 percent, and now stands at just 0.14 acres. The actual value lies somewhere between those two numbers, since a house’s square footage could include a second (or third) floor. Either way, it’s a substantial reduction.
Read the full story at: Very interesting!!
There Go My Brackets
From the Illinois Appraiser June 2016
Is it a USPAP violation to fail to bracket or end up with a tight bracket?
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There Go My Brackets
Check out the other very interesting articles such as AMC fair housing Myths and Evaluations. Link to the original newsletter.
My comment: I have never “bracketed” anything except the value when I used to do appraisals for Fannie Mae loans. I have no idea why lenders are requiring bracketing for everything with an adjustment. Just another Stupid Scope Creep I guess. Works ok in conforming tracts with lots of sales and minimal adjustments, but goes downhill quickly after that. Of course, the entire appraisal review-by-computer assumes that all houses are in conforming tracts. As do the Fannie forms, of course.
Time-lapse video of the International Space Station expandable habitat
Excerpt: On Saturday, May 14, NASA successfully completed the deployment of the first expandable habitat on the International Space Station. With help from the ground, NASA astronaut Jeff Williams began inflating the Bigelow Expandable Activity Module (BEAM) at 9:04AM ET.
He opened the valve 25 times to inject air into the module in short bursts, according to NASA. Time in between allowed the BEAM to expand and stabilize, as the NASA and Bigelow Aerospace teams monitored the module’s internal pressure. The BEAM was expanded to its full size seven hours later, at 4:10PM ET.
My comment: WoW!!!
United States Spy Town Auction
It’s not the first time that an entire American town has gone on the auction block, but it might be the most unusual. Sugar Grove Station, West Virginia was originally a United States Navy military base to support part of the National Security Agency’s surveillance operation. Though the array of giant parabolic dishes that continue to track location and content of international telecommunications activity is still in operation and not part of the sale, they are completely obscured from view behind thick forest on their ridgetop one mile distant. When it became unnecessary to house related analytical staff at the base, it was retired in the fall of 2015 and put up for auction to the highest bidder over $1 million.
Built between 1960 and 2014, the fenced and gated rural town has private full-service utilities to support as many as 500 people on over 120 acres. Included are 80 homes on tree-lined residential streets in like-new condition, a swimming pool, bowling alley, youth daycare center, community center with fireplace which was designed to function as a restaurant with bar, a gym, full-sized indoor basketball court, tennis and racquetball courts, a football field, large playground with kiddie pool, and twelve guest cabins for visitors. There are also several large buildings for multiple use as well as a four-section hobby building for working on cars, woodworking shop and other creative pursuits. For community safety, a police station and fire station are already in place.
… One architect’s proposed solution for low-lying cities that have trouble with flooding. Inspired by amphibious houses, Lira Luis’ concept asks: what if buildings could avoid flooding simply by not touching the ground at all?
As sea levels rise, some low-lying cities have started experimenting with floating buildings and amphibious houses. But one architect has another unlikely sounding suggestion: What if buildings could avoid flooding simply by not touching the ground at all?
Architect Lira Luis thought of the concept as she was working on another installation that happened to be on water and required invisible, easily removable attachments. She started using magnets for the attachments, and when she accidentally held the magnets the wrong way, she noticed that they repelled each other even through a layer of water.
Click here to read. A bit “techie” but fascinating.
Thanks to Matt Cook for posting this Most Interesting Link!!
My comment: This is very relevant for predicted increases in sea levels. I live in a low-lying coastal city in San Francisco Bay. Recently, part of the city’s flood maps were revised to 100 year flood levels, requiring flood insurance if you have a federally insured loan. As usual, all the complaints from owners were about having to buy flood insurance. My house is about 5-6 feet above typical high tide now. When there are very high “King” tides (high tide plus heavy rains), it is closer to high tides. Flood maps for all coastal areas in the country are being revised.