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Appraiser Holiday Season

December 2nd, 2013 by Bill Collins Leave a reply »


Health Benefits of Home Ownership

During this holiday season of giving thanks for what we have along with giving to those in need, it’s time for appraisers to step back from our daily battles and try to understand the human impact of these abstract numbers we review related to foreclosures and “underwater” homeowners (see “Recent Real Estate Reports” below).

The Census Bureau recently reported that the homeownership rate declined to 65.3% during the 3rd Quarter.  Human Impact Partners, an organization which conducts health-based analyses with a goal to correcting policies which make communities less healthy, summarizes the many health benefits of owning versus renting on their website as follows:

“In the short term, the wealth accumulation associated with homeownership improves access to neighborhoods with more health promoting assets, such as grocery stores, places to exercise, good schools, and so on, as well as to higher quality housing.

Relative to renters, homeowners have better physical health outcomes, lower child unintentional injury rates, higher self-esteem and lower levels of distress, and more positive mental health, which is associated with lower blood pressure.

The benefits of homeownership accrue independent of socioeconomic status, such that poor homeowners have better health outcomes than poor renters.

Investment in homeownership has been the primary long-term strategy to build wealth in the United States, and wealth is one of the strongest determinants of health”.

Numerous studies are cited in support of these findings and the following link provides information as to the sources of this research: Human Impact Partners Evidence Base

On November 25th, the Mortgage Bankers Association’s (MBA) Research Institute for Housing America released a related report entitled “A Profile of Housing and Health among Older Americans”.  Professor Michael D. Eriksen of Texas Tech University summarized some of the report’s findings as follows:

“The study found older Americans who own their homes are more financially secure and generally experience fewer impediments to good health than their peers who rent.  Owning a home provides the single largest asset in most Americans’ retirement portfolios, while renters have far more difficulty modifying their living space to adapt to any of the myriad physical ailments that tend to affect older people.  Our report serves as a useful reference for all parties interested in the implications of housing on an aging society, a situation America now faces with large numbers of the Baby Boomer generation rapidly heading into retirement age.”

A link to the MBA press release of November 25th is found here: Report Profiles Housing Future For Older Americans

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Recent Real Estate Reports

On November 26th, Zillow released their Home Value Index which showed declining home values for the second straight month in October for the first time in two years.  The index showed a month to month decline of 0.2%, at the same time the report showed an increase of 5.2% year over year.  Zillow reported price depreciation in half of the 388 metro areas covered and projected that prices would rise at a lesser annual rate of 2.7% for the period from October 2013 to October 2014.  Nationally, rents rose 0.2% from September to October and were up 2.3% from last year.

Zillow also reported that completed foreclosures fell slightly and foreclosure re-sales made up 8.7% of all sales, up 0.5% from September but down 2.1% from October 2012.

A link to the Zillow press release, which includes breakdowns by metropolitan area, is found here: October Marks Second Straight Month of Falling U.S. Home Values

Also on November 26th, the Federal Housing Finance Agency (FHFA) reported that home prices rose nationally by 2.0% from the 2nd Quarter of 2013 to the 3rd Quarter.  The FHFA tabulates their Home Price Index (HPI) from mortgages sold to or guaranteed by Fannie Mae and Freddie Mac.  The results represented the ninth consecutive quarterly increase and the first time since 2009 in which the level was higher than five years earlier.  Andrew Leventis, the Principal Economist for the FHFA, noted that:

“Overall, the housing market experienced another strong quarter, but price appreciation in the latter part of the quarter was relatively subdued. Price increases in August and September of 0.4 and 0.3 percent, respectively, were notably below appreciation rates observed earlier this year and in late 2012.”

Some highlights of the report:

~Prices increased by 8.4% during the 3rd Quarter of this year from the same quarter in 2012.
~Prices increased in 48 states and the District of Columbia with the following five states reporting the greatest appreciation: Nevada, California, Arizona, Florida and Washington.
~The Pacific division reported the strongest increase of the nine census divisions with an increase of 4.2% from the previous quarter and 19.2% year to year.  The least appreciation was within the East South Central division with an increase of just 0.8% from the previous quarter.
~The East South Central division reported the smallest increase of 0.8% from the prior quarter.
~The “distress-free” index (removing short sales and sales of bank-owned properties) reported lesser rates of appreciation.

A link to the entire 79 page report, including graphical depictions, is found here: US House Prices Rose 2% In Third Quarter 2013 (Opens a .PDF File)

On November 25th, the NAR reported that their Pending Home Sales Index fell in October by 0.6%.  This represented the fifth straight month of declining sales and brought the Index to its lowest level since December 2012.  The report noted that “Modest gains in the Northeast and Midwest were offset by declines in the South and West”.  Discussing his concerns going into the new year, the NAR’s chief economist Lawrence Yun stated that:

“New mortgage rules in January could delay the approval process, and another government shutdown would harm both housing and the economy.”

On November 24th, RealtyTrac released their Residential and Foreclosure Sales report for October which estimated that U.S. residential property sales increased by 2% from the prior month and were up 13% from October of 2012.  Short sales made up 5.3% of all sales, down from 6.3% in October and down 11.2% from one year ago.  Sales of bank-owned properties and public foreclosure auction sales were up from one year ago and cash sales made up 44.2% of all sales in October, up from 33.9% one year ago. 

The national median sale price was unchanged from the previous month at $170,000, a figure that was up 6% from October of 2012.  Distressed residential properties (either foreclosure or bank owned) sold for 41% less than the median price of $185,000 for non-distressed properties.

Daren Blomquist, vice president at Realty Trac, stated in the release:
“After a surge in short sales in late 2011 and early 2012, the favored disposition method for distressed properties is shifting back toward the more traditional foreclosure auction sales and bank-owned sales.  The combination of rapidly rising home prices — along with strong demand from institutional investors and other cash buyers able to buy at the public foreclosure auction or an as-is REO home — means short sales are becoming less favorable for lenders.”  

A link to the RealtyTrac report is found here:
Foreclosure Auction Sales and Bank Owned Sales Increase From Year Ago In October Even As Short Sales Decline

On November 25th, in a report titled “How Principal and Interest Rate Reductions Affect U.S. RMBS”, CoreLogic concluded that loans involving a reduction in principal out performed loans where the interest rate alone was reduced.  They noted that principal reduction made up only 10% of loan modifications, however, in comparison with rate reductions (45%), principal forbearance (21%) and other debt reduction (25%).  They noted that the number of principal reductions as a percentage of all modifications in a given month has tripled since 2011.

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A Reminder for Commercial Appraisers

Check out Commercial Express from Narrative1. During these busy times, the need for short format commercial appraisal formats (which allow for quick data input, analysis and report generation) is great and we suggest checking out this new product from the number one commercial appraisal software company.

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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.

Narrative 1 Commercial Express

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An Appraiser Speaks in Support of AMCs

New York appraiser Deborah Urianek writes:
“The appearance of AMCs is not new to the market.  As an appraiser with 30 years of experience, AMCs have always been a part of my ‘appraisal world’.  Although one cannot disagree with some of the negative things that have been said about AMCs, not all of my experiences have jaded my view of them and their place in the market.

Let’s get the big issues out of the way and the appraiser’s biggest complaint. Do I think that fees need to be increased? Yes! That being said, there is no rule that states an appraiser cannot quote a fee or accept the assignment.  Does the AMC have to accept the fee? No.  Are they going to ‘shop it’ well, of course they are.  Don’t you price quote some of your purchases?  Of course you do.  Does that mean that some appraisers are going to discount their fee in order to get the job? Of course they are.  Does that mean that those appraisers are not able to produce a quality product? No.  The bottom line is that once you have accepted the fee, now do your job the way that it needs to be done.

Who, you may ask has created part of this problem? Appraisers themselves.  We failed to ‘police’ our own.  Enter the AMC. 

I have worked with many AMC’s through the years.  Some of them are a joy to work with, some of them, not so much.  What I have learned and come to appreciate by working with them, is that they do care about the final product that they have passed on to the client.  I have learned that a majority of AMCs now have an actual appraiser who will step in and review your product.  There are times when maybe the addition or subtraction of a sentence may lend a greater understanding of how you have arrived at your conclusion.

I have come to appreciate the AMC ability to ‘step in’ when a situation arises that quite frankly, we don’t have to address for one reason or another.  I have come to appreciate that with very few exceptions, I have been paid for my work.  I have come to appreciate that the AMC’s I work with, respect the quality of the work of work that I produce and have had no hesitation in telling me so”.

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Watch This Space!

Next week, Appraiser News will be releasing it’s latest edition of it’s fully updated – and expanded – directory of National Appraisal Companies and AMCs with complete contact information and other details about each company.

Stay tuned for the release of this valuable new tool for Appraisers!

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Rates & Dates

Freddie Mac, the Mortgage Brokers Association (MBA) and HSH Market Trends reported mixed results regarding mortgage interest rates in their most recent surveys. 

On November 27th, Freddie Mac reported that 30-year fixed-rate mortgages rose to 4.29% from the previous week’s rate of 4.22%. They also noted that last year at this time the 30-year rate was at 3.32%. 

Frank Nothaft, vice president and chief economist for Freddie Mac is quoted in the release as saying:
“Fixed mortgage rates retraced some of their decline of the prior week as housing data portrayed mixed signals. The National Association of Realtors reported that their pending sales metric dipped for the fifth consecutive month and was slightly below year-ago levels, presaging a softening in sales near yearend. Nonetheless, house prices rose as homes-for-sale inventory remained tight in many markets. The S&P/Case-Shiller House Price index released yesterday showed prices in the 20 largest cities increased 13.3 percent annually in September, the highest year-over-year increase since February 2006, and a bit stronger than the Federal Housing Finance Agency’s U.S.-wide Purchase-Only index, which appreciated 8.5 percent over the same period”.

The MBA did not release their Weekly Mortgage Applications Survey during the holiday shortened week but their previous release on November 20th for the week ending November 15th, reported that 30-year rates with conforming loan balances ($417,500 or less) increased to 4.46% from 4.44% during the previous week.   The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) dropped to 4.47% from 4.48%.  Rates for FHA backed mortgages declined to 4.14% from 4.16%. 

In their press release of November 20th, the MBA reported a decline of 2.3% in mortgage applications with refinance applications sliding to 64% from 66% of all applications the previous week.    

On November 27th, HSH Market Trends reported that 30-year mortgage rates increased to 4.41% from 4.37% the previous week. Rates for FHA-backed mortgages rose from 4.02% to 4.05%.

In their news release of November 27th, HSH commented that: “There’s not a whole lot to say about the direction for mortgage rates this week. We are in a bit of a lull — call it a sweet spot, if you will — between Fed meetings, between significant economic reports, and in a once-in-a-many-lifetime concurrence of the Thanksgiving and Hanukah holidays”.

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

Additional information from HSH can be found by going to: HSH.Com

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Ask Angie

We would first like to congratulate our most recent winner: Florida appraiser Marvin Kalesky of Able Appraisals.  Able Appraisals covers the south Florida counties of Broward, Palm Beach and Miami-Dade, the second week in a row in which the winner covers these counties.  Marvin was the first to answer correctly that William Blake was the author of the quote “The thankful receiver bears a plentiful harvest”; the quote “As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them” was said by John F. Kennedy; and Jon Stewart quipped " I celebrated Thanksgiving in an old-fashioned way. I invited everyone in my neighborhood to my house, we had an enormous feast, and then I killed them and took their land.

Today’s questions:

1. Who said: “I once wanted to become an atheist, but I gave up-they have no holidays.”

a) Groucho Marx
b) Jerry Seinfeld
c) Alan King
d) Henny Youngman
e) None of the above

2. Who said: “Just as the commandment ‘thou shalt not kill’ sets a clear limit to safeguard the value of human life, today we also have to say ‘thou shalt not’ to an economy of exclusion and inequality."

a) Warren Buffett
b) Donald Trump
c) Joseph E. Stiglitz
d) Pope Francis
e) None of the above

3. Who said: "Please, God, just one more bubble."

a) Alan Greenspan
b) Robert Shiller
c) Lawrence Yun
d) Famous Silicon Valley Bumper Sticker
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 Upcoming 2014 Directory of Appraisal Management Companies (Available to Members of and FREE!)

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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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