A Black couple ‘erased themselves’ from their home to see if the appraised value would go up. It did - by nearly $500,000

[J Grant]

he advocacy group cites circumstances in which appraisers choose comparisons of other home sales located substantially closer to the property receiving an appraisal if within a Black or Latino census tract, Executive Director Caroline Peattie pointed out.
The average distance between a subject property and its comps is substantially smaller when the property is in a Black or Latino tract than in a White tract.

One of the dumbest things I have ever read, - if that is true, perhaps it is because a greater portion of census tracts that have greater # of black or latino residents are more densely built or urban areas ? Like doh those houses or condos are actually built closer to each other ?

 

[CGinMN]

As I've said in the past, we are dealing with the sins of prior housing segregation. They're gonna nail individual appraisers to the ****ing cross over this stuff. Meanwhile, the bankers, GSEs, and Feds - the ones actually responsible - will be like, "It was appraisers all along!"

 

[George Hatch]

I'm sure you saw the vid with the 2 sociologists and the activist from the Brookings Institute. Their theory is that the Sales Comparison process itself is inherently racist because of the redlining that the lenders did back before the Civil Rights Act and because of some dated verbiage and instruction in the appraisal texts of the day. The activist guy came right out and said that he didn't care how it was done but that we had to find other ways to value properties besides the SC that would be more fair to properties in these impacted areas.

Okay, if "location" gets deemed to be a prohibited attribute for comp selection in the SC then it's going to be deemed just as unfair when I use location as a search parameter for land sales for the Cost Approach and when I use location as a search parameter for rental comparables (and GRMs) in the Income Approach; all of which leads back to the same conclusion that *to the market participants" whose actions we are attempting to emulate "similar" invariably includes location.

 

[glenn walker]

he advocacy group cites circumstances in which appraisers choose comparisons of other home sales located substantially closer to the property receiving an appraisal if within a Black or Latino census tract, Executive Director Caroline Peattie pointed out.
The average distance between a subject property and its comps is substantially smaller when the property is in a Black or Latino tract than in a White tract.

One of the dumbest things I have ever read, - if that is true, perhaps it is because a greater portion of census tracts that have greater # of black or latino residents are more densely built or urban areas ? Like doh those houses or condos are actually built closer to each other ?

In small communities that is true but I know Parts of Los Angeles that can be 20 miles of Black and Latino the problem is in many areas Latinos are the majority and then its White and finally Blacks . BUT nobody has ever said when is a minority no longer a minority ?

 

[George Hatch]

As I've said in the past, we are dealing with the sins of prior housing segregation. They're gonna nail individual appraisers to the ****ing cross over this stuff. Meanwhile, the bankers, GSEs, and Feds - the ones actually responsible - will be like, "It was appraisers all along!"

View attachment 57115

Hey, I have no problem with the idea of applying the principals of affirmative action to certain identified neighborhoods or borrowers as a social entitlement. If that's what the govt wants us to do it's no skin off my nose. Just come out and say so, and then take the responsibility for saying so and passing those instructions onto us.

If the lenders want to go to 125% LTVs for certain deals in order to increase the so-called generational wealth that's fine by me. If they want to come up with some version of mortgage value that amounts to MV+25% reparations bonus then that's fine by me. I'm a professional, so I literally don't care what your motivations are, I just want to say what I do and do what I say. Just tell me which definition of value you find to be meaningful to your decision making and I'll deliver it.

What I don't want to be tasked with doing is to be asked to say one thing ("this is MV") when what they really want me to return is an undisclosed form of Mtg Value.

 

[CGinMN]

Hey, I have no problem with the idea of applying the principals of affirmative action to certain identified neighborhoods or borrowers as a social entitlement.

We've already seen what low-interest rates can do to home values. If you want to raise the values in an area, or with a specific group, change the interest rate and watch the market magically sort it out.

 

[George Hatch]

Works for me. But then again, that's a user decision; not an appraiser decision.

 

[RCA]

I've got areas along the coast in CA where price values have nearly doubled in the past 3 years (to the month). So, a house purchased for $1.5M at the beginning of 2019, is now worth over $3.0M in December. How's that for an investment? [ Average house price going up $1600/day, past 1.5 years maybe $2200/day]

I've a also had some very difficult properties to appraise in Sausalito (namely triplexes where the owner lives in one of the units and rents out the other), nothing hard in Mill Valley - although nothing in one of the transitional areas.

All in all, given that this area is likely a transitional area, this sort of thing is quite possible, especially with less astute appraisers. In fact, using linear vs non-linear regression on market conditions can be risky, especially if your analysis is going back more than 4 years (which it wouldn't for most appraisers).

The state, by encouraging these kinds of lawsuits, isn't doing anyone a favor really - except the attorneys. .... Yea, guaranteed, this whole thing is about feeding attorneys.

 

[George Hatch]

The difficulty with alleging misconduct by the appraiser in this case is that the subsequent sales in this neighborhood don't support the allegation that this property was grossly undervalued as of early 2020. So much so that it's going to be hard to demonstrate how that outcome is the result of misconduct, much less attributing that outcome to an allegation of racism. If anything, it wouldn't be a crazy idea to scrutinize the $1.5M appraisal for possible misconduct.

 

[glenn walker]

3% to Minority and 5% to Whites --Fixed it : )