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Summer-izing Real Estate Reports; The 4% Solution‏

August 27th, 2012 by Bill Collins Leave a reply »

Flurry of Positive Real Estate Reports, Along With Cautionary Words

Last Wednesday, the National Association of Realtors (NAR) reported that existing-home sales in July rose by 2.3% from the previous month. The NAR reported a substantial price increase year-to-year which they attributed to fewer sales in the lower price ranges as sales of distressed homes (short sales and foreclosures) declined to 24% of overall sales (half short sales, half foreclosures) from 29% during July 2011.  The NAR reported average discounts of 17% and 15% from market value respectively for foreclosure and short sales in July.

The NAR reported that 27% of transactions were all-cash in July, down from 29% in June and 29% in July 2011.  Investor purchases represented 16% of July’s transactions, down from 19% in June and 18% in July 2011.

In its report last Wednesday, the NAR included the following statement:
“NAR is asking the government to expeditiously release the foreclosed properties it owns in inventory-constrained markets.” takes issue with this simplistic statement released by the NAR.

Writing in the Wall Street Journal on August 23rd, Justin Lahart noted that “the NAR’s statistical acumen has a less-than-sterling reputation.” While acknowledging that the NAR’s current reports are consistent with other sources, Mr. Lahart raised the concern “…that shadow inventory would buckle housing…”  He offered his opinion that it while it is still could “sink the housing recovery” it “…hasn’t shown up. Perhaps it never will.”

On August 8th, CNBC’s Diana Olick interviewed new Fannie Mae President & CEO Timothy Mayopoulos regarding recent reports of improvement in the housing market along with Fannie Mae’s improved financial performance.  Mr. Mayopoulos offered his opinion that “…prices have stabilized but they could go up a little, they could go down a little over the coming months…”  A link to the CNBC video interview is found here: Fannie Mae CEO on Housing

On August 7th, CoreLogic released their June Home Price Index which reported a 2.5% increase, year to year, in home prices (including distressed sales).  They also reported a 1.3% increase from the previous month and noted that this was the fourth consecutive month where their index reported increases in both month to month and year to year prices. 

Including the distressed sales, the five states with the greatest appreciation were Arizona, Idaho, South Dakota, Utah and Wyoming.  Excluding distressed sales, the five states with the highest appreciation were South Dakota, Utah, Montana, Arizona and Wyoming.

The five states with the greatest depreciation, including distressed sales, were Alabama, Connecticut, Illinois, Georgia and Delaware.  Excluding distressed sales, the five states with the highest depreciation were Delaware, Alabama, Connecticut, New Jersey and Kentucky.

Through the end of May, CoreLogic reported the following states as showing the greatest market peak-to-current price declines: Nevada (-57.1%), Florida (-45.3%), Arizona (-44.1%), California (-39.2%) and Michigan (-39.0%).

CoreLogic president and CEO Anand Nallathambi was quoted in the release as saying:
“At the halfway point, 2012 is increasingly looking like the year that the residential housing market may have turned the corner. While first-half gains have given way to second-half declines over the past three years, we see encouraging signs that modest price gains are supportable across the country in the second-half of 2012.”

A link to the CoreLogic news release is found here: CoreLogic June Home Price Index Rises 2.5 Percent – Representing Fourth Consecutive Year-Over-Year Increase

Two days later, CoreLogic released their August MarketPulse Report.  This report highlighted positive signs for the housing market but also had some cautionary findings.  A “key finding” highlighted in their news release was that:
“Many borrowers in both the boom and ‘rust-belt’ markets lack the means to prevent serious delinquency due to their limited ability to refinance at a lower mortgage interest rate. Policies designed to offer options for borrowers to lower their interest rates further can help decrease the flow of future delinquencies.”

These cautionary words add credence to the plan offered by Oregon Senator Jeff Merkley on July 25th in a white paper titled “The 4% Mortgage: Rebuilding American Homeownership”.  A press release that day quotes Senator Merkley as saying that:
“Four years ago, the U.S. government acted quickly and boldly to rescue major financial institutions.  However, we have not done nearly enough for American families who are struggling with the downturn in the housing market.  There are millions of Americans trapped in high-interest mortgages, and that’s not just bad for them, it’s bad for neighborhoods hit by foreclosures and it’s a huge anchor on our economy.  A bold solution to help these families refinance is the fastest way to get our economy back on track.”

Support for the senator’s plan came from a number of prominent economists.  Dr. Joseph Stiglitz, Professor of Economics at Columbia University stated that:
“America’s economic recovery is being held back by $700 billion in negative equity in the housing market…Senator Merkley’s broad refinance proposal would allow these families to refinance into loans with a lower interest rate, freeing consumer resources to be spent on other important needs, or allowing the homeowner to rebuild equity more quickly.  If adopted, this proposal would help to stabilize the housing market, create new jobs, and boost our overall economy.”

Mark Zandi, Chief Economist at Moody’s Analytics called the plan “…a creative and bold effort to address the serious economic threat posed by millions of underwater homeowners.  With so many underwater, odds remain uncomfortably high that the housing market and broader economy will continue to struggle.  Previous attempts to solve this problem have fallen well short.  Senator Merkley’s plan is an ambitious one, and should be carefully considered.”

Support was forthcoming from NAR (National Association of Realtor) President Moe Veissi who said that this “…is exactly the innovative approach that our nation must take to ensure a sustained housing recovery.”

A link to the press release announcing Senator Merkley’s plan (along with links to the full plan itself and a YouTube announcement) are found here:
Merkley Announces Bold Plan to Jump-Start Housing Markets

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Appraisers Approaching License Renewal: McKissock’s 7 Hour 2012-2013 USPAP Online Course is Now Available in Most States

McKissock Education, the official provider of the Appraisal Foundation’s online 2012-2013 USPAP courses, is now available in most states. Last year, the Appraisal Foundation and McKissock announced their partnership and the online course is now available in most states. See if courses are available in your area and save up to 20% on course fees by going to our Online McKissock Portal.

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More Reader Comments About Our Report On AMCs in Recent Newsletters

Florida Certified General Real Estate Appraiser Nicholas R. Monte writes: “I guess all those appraisers criticizing the ‘Unnamed Appraiser’ who withheld ‘unnamed AMC’ haven’t heard of libel and/or slander laws.  The greater the truth, the greater the libel.  In this day and age, everyone, I mean everyone is open to any kind of suit.  In addition to having to deal with low appraisal fees, can we withstand the cost of a lawsuit as well?”

Ohio Certified General Real Estate Appraiser Timothy Poppaw writes: “I was reading the responses about whining about AMCs. I do work for them and have for years. They pay better fee splits than the "good old boys" who had our market all locked up that I have worked for. So I don’t think I would equate bad work/bad quality with the fee split paid. Sounds like the people who are whining are the "good old boys" who lost their lock on the market”.

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Real Estate Appraisers in Florida and Real Estate Licensees in Montana and Michigan: October 31st is the Deadline for License Renewal

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AppraiserNews is a FREE publication, supported by advertising and sales of products designed to help appraisers support and grow their businesses. Please consider supporting us today by seeing what we and our sponsors have to offer.

Start saving up to 20% off of your continuing education course fees today with McKissock and Appraiser Help! 2012-2013 USPAP Courses Now Available!

Rates & Dates

Mortgage interest rates increased again in the weekly reports issued by Freddie Mac and the Mortgage Bankers Association (MBA).

On August 23rd, Freddie Mac reported that 30-year fixed-rate mortgages increased from the previous week’s rate of 3.62% to 3.66%, the fourth straight week of increases.  They also noted that last year at this time the 30-year rate was at 4.22%. 

In a press release that day, Freddie Mac vice president and chief economist Frank Nothaft stated that: "Fixed mortgage rates inched upward this week along with other long-term yields. The Census Bureau reported that residential building permits were up in July, although builders slowed the pace of construction starts on one-family homes in July to the least since March while apartment and condominium building picked up to the most since April. Existing home sales rose in July from June’s eight-month low and the median sales price jumped 9.4 percent from a year earlier, representing the largest 12-month gain since January 2006. The price gain was broad-based, with annual increases registered in all four regions of the U.S. and led by a 24.5 percent increase in the West."

The MBA in its most recent Weekly Mortgage Applications Survey released August 22nd for the week ending August 17th, reported that 30-year rates with conforming loan balances ($417,500 or less) increased to 3.86% from the previous week’s rate of 3.76%.  The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) also increased from 4.03% to 4.11% and the average rates for FHA backed mortgages rose to 3.62% from the previous week’s rate of 3.53%. 

In their press release of August 3rd, the MBA reported a decline of 7.4% in mortgage applications.  Refinance applications represented 80% of all applications.  The HARP share of refinance applications remained at 24%, the same as the previous week while the investor share of purchase applications increased to 5.7% in July from 5.5% in June.

Additional information from Freddie Mac can be found by going to: Primary Mortgage Market Survey PMMS – Freddie Mac

Additional information from the Mortgage Bankers Association can be found by going to their site at: Research and Forecasts – Mortgage Bankers Association

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AppraiserNews is a FREE publication, supported by advertising and sales of products designed to help appraisers build their practices. Please consider supporting us today by seeing what we have to offer.

The All New, Fully Revised Directory of AMCs and National Appraisal Companies is now available for download! Please visit our website to learn more. Current members of our Appraiser Directories are eligible to receive their copies FREE!

Ask Angie

We would first like to congratulate our most recent winner: Patricia Leahy, a Certified Residential Appraiser with Advantage Appraisal Services of N.W. Florida. Patricia  covers the counties of Navarre, Santa Rosa, Escambia, Okaloosa and Walton in northwest Florida.  Patricia was the first to answer correctly that Charles Dickens was the author of the quote "It is no small thing that they, who are so fresh from God, love us.”; Carl Sagan said "If you wish to make an apple pie from scratch, you must first invent the universe."; and the quote "Work like you don’t need the money. Love like you’ve never been hurt.  Dance like nobody’s watching." is attributed to Satchel Paige.

1. Who said: "A beach house isn’t just real estate. It’s a state of mind."

a) Barbara Corcoran
b) Douglas Adams
c) Anna Quindlen
d) Conrad Hilton
e) None of the above

2. Who said: "Summer afternoon-summer afternoon; to me those have always been the two most beautiful words in the English language."

a) Dennis Wilson
b) Henry James
c) Yoko Ono
d) George Gershwin
e) None of the above

3. Who said: "Never have children, only grandchildren."

a) Andy Rooney
b) Gore Vidal
c) Nora Ephron
d) Judith Crist
e) None of the above

The first person to respond with the correct answers wins a choice of one of the following:

One Free Regular Listing on

A Free Copy of the NEWLY RELEASED 2012 Directory of AMCs and National Appraisal Companies!

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Tell us what you think!

We invite your responses to any of the issues raised in this newsletter. Please e-mail us at: with your thoughts!

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We really hope you find our newsletter to be informative!  If you have any input on future topics for discussion, please email me your questions and I will do my best to address them in the next issue.  If you want to look back at past issues you can see our archive at


Bill Collins, Appraiser Help Inc.

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