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Mortgage Appraisals Drop, What Should An Appraiser Do?

February 25th, 2014 by Bill Collins Leave a reply »

Mortgage Appraisals Drop, What Should An Appraiser Do?

1)  Retire or change profession.

2)  Increase their skill sets (i.e. residential appraiser gaining experience with commercial work, learning to appraise high value or special use properties, etc.).

3)  Increase marketing for all areas of their appraisal practice.

4)  Build a healthy private (non-mortgage) appraisal practice.

In the next section, let’s take a look at performing appraisals for tax grievance and appeal, a neglected area for many appraisers.

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Tax Grievance and Tax Appeal Season Opens in Many States

Appraisers have opportunities in many states to perform appraisals on both residential and commercial properties for the purpose of helping to determine the proper assessment (and ultimately, the tax burden).  For some reason, many appraisers have not familiarized themselves with the rules and regulations (i.e. effective date of the appraisal, deadline for filing, mandated approach to value, etc.) in the various assessing jurisdictions within which they work.  In addition, the manner in which these rules and regulations are implemented can vary from one municipality to the next within a state with some assessors more flexible (i.e. allowing submissions outside of the prescribed period for filing) and others strictly adhering to the deadlines.

Appraisers within areas of high property taxes obviously are likely to have more opportunities to perform tax grievance or tax appeal appraisals than those in areas of low tax burdens.  Benjamin H. Harris and Brian David Moore, in a recent study for the Tax Policy Center of the Urban Institute and Brookings Institution, discussed the uneven level of residential property tax burdens.  Some of their findings:

~Property taxes are a major source of revenue for local governments, accounting in 2011 for 34.6% of total revenues and 63.9% of local own-source revenue.  Property taxes account for at least 30% of local revenue in most northeast states with many states in the south and west reporting substantially lower rates.  An exception: Texas with 32% of revenues coming from property taxes.

~Counties with average annual tax burdens of more than $8,000 are all located in either New York (Nassau, Rockland and Westchester) or New Jersey (Bergen, Essex, Hunterdon, Morris, Passaic, and Somerset).  Eight states (mostly in the south) had average annual property tax obligations of less than $1,000.

~The portion of property taxes attributed to residential properties as compared with commercial/industrial properties has risen from approximately 1/2 to 2/3 in recent years.  Residential property taxes now account for approximately 25% of the cost of homeownership.

~As a percentage of home value, residential property owners in 36 states paid between 0.5% and 1.5%.  Residents of 3 states (Delaware, Hawaii and Louisiana) paid 0.5% or less while those in 11 states (Connecticut, Illinois, Michigan, Nebraska, New Hampshire, New Jersey, New York, North Dakota, Texas, Vermont, and Wisconsin) paid more than 1.5%.

A link to the Urban Institute and Brookings Institution report (which cites sources and provides more detailed breakdowns by state) is found here: Residential Property Taxes in the United States

In addition, here is a link to a CNNMoney interactive map displaying the tax burdens in over 3,000 counties throughout the United States: Property Taxes: How Does Your County Compare?

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Deadlines for Filing Tax Grievances and Appeals in Some States With Substantial Tax Grievance Activity

New Jersey: April 1st (or May 1st where municipal-wide revaluation or reassessment has been implemented). Additional information can be found at: New Jersey Guide to Tax Appeal Hearings

New York: Generally May 20th (except for Nassau County which is March 3rd).  Additional information can be found at: Contest Your Assessment

Ohio: March 31st.  Additional information can be found at: Ohio Board of Tax Appeals

Texas: May 31st (or 30 days after a notice of appraised value is mailed to a property owner).  Additional information can be found at: Property Tax Protest and Appeal Procedures

Pennsylvania: Varies (Many counties have moved deadline ahead to September 1st; Philadelphia is October 1st; Allegheny is March 31st).

Michigan: July 31st.

Illinois: Varies.

This is obviously a partial list, opportunities to perform tax grievance and appeal are available to residential and commercial appraisers in many other assessing jurisdictions throughout the country.  Please remember to confirm effective dates, filing deadlines and all regulations with any assessing municipalities in which you appraise.

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Please visit our website now to make your purchase securely or contact us at (877) 434-2825 for more information on this comprehensive directory!

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Recent and Upcoming Real Estate Reports

Last Thursday, CoreLogic released their February MarketPulse Report.  Some of its highlights:

~The homeownership rate declined to 65.3% in the 3rd Quarter of 2013, a decline of almost 4 percentage points from the peak of 69.2% in the 4th Quarter of 2004.

~Home affordability was down 17% from one year ago and 22% beneath the January 2013 peak.

~Nationally, home prices were 11% higher in December 2013 from the same month one year ago.

That same day, CoreLogic’s Sam Khater reported on “Real Estate’s One Percent”.  He notes that sales of million dollar homes constituted 1% of all sales for many years preceding 2004, after which they surged and eventually made up more than 2% of sales until the collapse of the financial markets in 2008.  As of early 2009, sales of million dollar homes had declined to approximately 1% of all sales. 

Mr. Khater discusses the correlation between the S & P 500 stock index and the sales of million dollar homes, which increased to more than 2% of the market in the middle of last year, at the same time the S & P 500 was rising rapidly. He notes that the S & P 500 is an effective two month leading indicator for the sales of million dollar homes.

Last Friday, the National Association of Realtors (NAR) reported that existing home sales dropped by 5.1% in January from the previous month as well as declining 5.1% from January 2013.  Distressed sales (foreclosures and short sales) made up 15% of the market in January 2014 compared with 14% one month prior and 24% one year ago.

The NAR reported that first time buyers made up just 26% of purchases last month, the lowest rate since the NAR began measuring this in October 2008.  The news release noted that this figure “should be closer to 40%”.

A link to the NAR news release is found here: Existing Home Sales Drop in January While Prices Continue to Grow

Reports out this week:

Later this morning: the December S & P/Case-Shiller Home Price Index and the Federal Housing Finance Agency House Price Index will be released.  The Commerce Department reports on new-home sales for January on Wednesday and the NAR releases their pending home sales report for January on Friday.

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Rates & Dates

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

On February 20th, Freddie Mac reported that 30-year fixed-rate mortgages increased to 4.33% from 4.28%. They also noted that last year at this time the 30-year rate was at 3.56%.  Frank Nothaft, vice president and chief economist of Freddie Mac, added: "Mortgage rates crept up further following the uptick in the 10-year Treasury yield as minutes of the Federal Reserve’s last meeting indicated little possibility of a pause in the central bank’s reduction of bond purchases. Housing starts in January fell 16 percent to a seasonally adjusted annual rate of 888,000 units, below consensus forecast. Permits were at a seasonally adjusted annual rate of 937,000 in January, also below consensus." In a news release two days earlier accompanying “Freddie Mac’s February 2014 U.S. Economic and Housing Market Outlook” Mr. Nothaft stated that: “…if rates continue their upward trend, it will be difficult for many families to purchase a home without seeing some income growth. Rising home prices and interest rates along with little to no income growth has resulted in a substantial erosion of homebuyer affordability over the past year. Therefore, jobs and income growth are necessary for 2014 to turn in another gold-medal performance for the housing recovery."

The Mortgage Bankers Association (MBA) reported on February 19th (for the week ending February 14th) that 30-year rates with conforming loan balances ($417,500 or less) rose to 4.50% from 4.45% the previous week.   The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 4.45% from the previous week’s rate of 4.40%.  Rates for FHA backed mortgages also moved upward, to 4.16% from 4.13% the previous week.  Mortgage applications declined by 4.1% from the previous week with refinance applications falling to 61% of the total, down from 62% the previous week.

One day later, the MBA released their National Delinquency Survey for the 4th Quarter of 2013 which reported that delinquency rates declined to 6.39% at the end of 2013, the lowest figure since the 1st Quarter of 2008.  This represents a drop of more than 3% from the peak of greater than 10% in 2010. 

A link to this report (which includes breakdowns by area and type of loan) is found here: Press Release – NDS

On February 21st, HSH Market Trends reported that 30-year mortgage rates increased to 4.44% from 4.40% the previous week. Rates for FHA-backed mortgages also rose, from 4.01% to 4.06%.

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: Beaumont, Texas appraiser Christopher Rieve.  Christopher was the first to answer correctly that John Lennon was the author of the quote “The more I see, the less I know”; the quote “I give them a year” (referring to the Beatles) was said by Ray Bloch, musical director of the Ed Sullivan Show, in 1964; and Paul McCartney sang “And in the end, the love you take is equal to the love you make.”

Today’s questions:

1. Who said: “Here is my principle: taxes should be levied according to ability to pay. That is the only American principle."

a) Franklin Delano Roosevelt
b) Warren Buffet
c) David H. Koch
d) Charles G. Koch
e) None of the above

2. Who said "We don’t pay taxes. Only the little people pay taxes."

a) Donald Trump
b) Leona Helmsley
c) Mitt Romney
d) Marissa Mayer
e) None of the above

3. Who said: "The dullest Olympic sport is curling, whatever ‘curling’ means."

a) Bob Costas
b) Meredith Viera
c) Andy Rooney
d) Al Michaels
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 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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