As If We Didn't Know

Discussion in 'General Appraisal Discussion' started by Steve Owen, Dec 24, 2004.

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  1. Steve Owen

    Steve Owen Elite Member

    0
    Jan 16, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Missouri
    Just like the FEDs to release bad news and then take a holiday. :lol:

    Most of you probably already saw this: the largest decrease in new homes sold in ten years. But, many may not have seen the other info concerning the "steady" but "unspectacular" expansion of the economy.

    http://www.msnbc.msn.com/id/6749875/

    Actually, some parts of the report were pretty promising, but for residential appraisers, it doesn't look too good. If consumer confidence and manufacturing employment improve while at the same time interest rates increase and housing starts decline, that is kind of the "perfect storm" for decreased need for appraisals. It could lead the way to fewer orders for new housing and fewer orders for REO's at the same time. Of course, the ERC market might improve some and this doesn't say anything about existing housing sales. Note that mortgage applications were still strong, but don't count on that to last if rates start going up on a steady incline.

    My favorite quote:

    Of course... with all the bad press they've been dealing with lately, the last thing they need is a "significant downturn." ;)
     
  2. Richard Carlsen

    Richard Carlsen Elite Member

    0
    Jan 15, 2002
    Professional Status:
    Licensed Appraiser
    State:
    Michigan
    You have to read these reports carefully before you jump to any conclusions.

    They are talking about "new houses" - not lived in, existing houses. These numbers do not take into account the sales of existing homes at all. And the month, November, was an interesting month for the American public. We had an election remember? A lot of businesses waited to see what was going to be the outcome of that. My guess is that the general buying public did much the same thing. Don't be surprised to see these numbers bounce right back up within the next 2-3 months.

    And we have to remember that these are only one month's numbers. One robin does not make a spring; one sale does not make a market and on month statistics does not make a trend.

    But take a look at the numbers involved: 1.125 million units. That is an annualized rate of one new housing unit built and sold for each 237 Americans. Combine that with the numbers of existing home sales and you have a fairly heady housing market. In fact, if your run a Google search on existing house sales, you get almost nothing but news that the sales of existing homes are up in nearly every part of the country. NAR reported in late November that existing house sales were at an annualized rate of 6.75 million units. In the big scheme of things, new housing sales represents only about 15% of the housing sales. So if it is down 12% then that amounts to only a 1.7% decline assuming existing house sales remain constant.

    But then, I've been accused of being the eternal optimist because I see the glass half full, not half empty. Fewer appraisals? Maybe. Fewer appraisers? Maybe. Whatever happens, I intend to be one that will have my share of the market.
     
    Last edited: Feb 15, 2006
  3. Mike Garrett RAA

    Mike Garrett RAA Elite Member

    1
    Jan 14, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    As far as the eye can see....an ocean of new construction starts IN MY MARKET. One month does not a market make.
     
  4. Ray Miller

    Ray Miller Elite Member

    0
    Feb 20, 2002
    Professional Status:
    Licensed Appraiser
    State:
    Wisconsin

    I think there is developing a shortage of inventory of "lived in, existing houses" in the area I work.

    Have started noticing advertisement by real estate agents asking people to list their homes for sale. These ads are appearing in all the little shopper stopper free papers.

    I think a lot of the homes have now been sold that were going to be, the other others have been refinance at such low interest rates. The current owners don't want to sell with rates going up now and buy something at a higher rate.
     
  5. Elliott

    Elliott Elite Member

    5
    Apr 23, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Oregon
    I don't think the media is capable of looking at economic
    statistics during a republican administration and
    saying something good about them.

    The only figure I put any stock in is GDP....which was
    revised from 3.3 to 4% for the 3rd quarter. I
    have a hard time finding that growth rate anything
    short of perfect....one even Goldielocks would be
    happy with.

    elliott
     
  6. Linda M Lynch

    Linda M Lynch Junior Member

    0
    Dec 12, 2002
    Professional Status:
    Licensed Appraiser
    State:
    Wisconsin
    Boy they sure aren't looking at Madison, Wisconsin. New houses are going up in this area so fast that it seems as though you drive by a large farm one day and a month later there is an entire subdivision there.
     
  7. Otis Key

    Otis Key Elite Member

    0
    May 15, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    New Mexico
    Steve - you know as well as the rest of us, it's not what you say but how you say it.
     
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