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a great comment on the market conditions

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444nutman

Senior Member
Joined
Jun 20, 2007
Professional Status
Certified Residential Appraiser
State
Florida
I just read this one on an appraisal sent to me today. I want to remind everyone I am in Florida which has been declining quite awhile. The original guy checked stable, inbalance, and 3-6 months. The subject is of off hwy 27 in north haines city/South Davenport. 7% decline over the year and 12% decline the last 6 months. Dom 189 last year and last 6 months 192. When he did the appraisal the house was listed for 189,900 8 months ago and he appraised at $228,000 and of course no prior mention of the listing.

Here is the winning comment on the marketing conditions that made me laugh due to being so bad. Verbatim
Supply and demand are coming into balance. Marketing time are relatively low at presen. (sic) No adverse conditions noted.
WTF does that mean. BTW that is all he wrote for marketing conditions.
The thing that angers me more is he got 25 bucks more from the lender than I do. Btw the lender told me he is no longer allowed to do appraisals for them. SHOCKER When I get a second I need to forward to the state. They never do anything but it is worth a shot.
 

c w d

Senior Member
Joined
Oct 2, 2006
Professional Status
General Public
State
Florida
If he can't do appraisals for them any longer then you should be able to raise your appraisal fees by $50 - $75 bucks for that client.
 

agedaprsr

Freshman Member
Joined
May 29, 2008
Professional Status
Certified Residential Appraiser
State
Florida
Wtf ?

Out of curiosity did he/she have three to six months marketing time checked on the first page ?

I am absolutely amazed how many appraiser's are still in business that never mention prior listing histories, or days on market.

Gotta love the explanation of Market Conditions though !! Sad part is a lot of really good appraisers aren't working but this one is......... go figure ! At least tell me it was a local appraiser !
 

444nutman

Senior Member
Joined
Jun 20, 2007
Professional Status
Certified Residential Appraiser
State
Florida
Out of curiosity did he/she have three to six months marketing time checked on the first page ?

I am absolutely amazed how many appraiser's are still in business that never mention prior listing histories, or days on market.

Gotta love the explanation of Market Conditions though !! Sad part is a lot of really good appraisers aren't working but this one is......... go figure ! At least tell me it was a local appraiser !
3-6 months on the first page. He was from Orlando like me. I think the marketing is a canned one he has been using for years. His number is lower than mine which only means with his experience he could have come up with a better market conditions comment.
 

Hamlet

Elite Member
Joined
Aug 14, 2006
Professional Status
Certified Residential Appraiser
State
Ohio
You ought to suggest your own canned comment to this appraiser. EXIT STAGE LEFT.
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
Here's a copy and paste from a portion of a review I completed a couple of days ago. Last paragraph is a discussion of the alleged market analysis contained in the report under review.

Market conditions as of the effective date of the work under review:
The mortgage lending market remained volatile and unsteady through much of the nation and many areas of Mendocino County including the subject's market area of Fort Bragg Central (within the city limits of Fort Bragg). Many lending programs and products that were readily available less than a year ago are no longer available and there has been a significant decline of investors in the secondary market. The result is higher borrower qualification, less liquidity and other conditions resulting in fewer loans being made. Fewer loans available reduces the amount of purchase-ready buyers and increases the amount of competition among the sellers for those fewer buyers. When sellers are competing for buyers, they do so by lowering prices. Media saturation campaigns detailing the current problems in the mortgage lending industry and it's effect on real estate markets, in particular the specter of upcoming foreclosures resulting from resetting adjustable rate mortgages in combination with declining residential property values appeared to be exacerbating the problem. This dynamic was apparent in trend analysis and its influence, based on my research and conversations with market participants, was present in this market and likely to increase. Median sales price in Mendocino County had fallen from $400,000 last year to $348,000 as of March 2008. Areas most affected are the more metropolitan areas in the incorporated cities of Ukiah, Willits and, in the Mendocino Coastal area, the City of Fort Bragg. More frequent notices of listing price reductions are being sent to CMAR MLS members via email.

The incorporated City of Fort Bragg market appears to be severely impacted by ongoing adverse market conditions resulting from the problems in the subprime market described above. Driving the market were out of area investors and speculators which by July or August of 2007 had started pulling out. Sales activity has almost stopped completely. For the period March 2006 to March 2007 there were about 69 closed sales in central Fort Bragg with a median price of $409,000. For the period March 2007 to March 2008 there were only 24 sales with a median price of $365,000. From September 2007 to March 2008 there were only 8 closed sales with a median price of $319,000. Average days on market (exposure time) has increased from about 175 days in 2006/2007 to 297 days as of the effective date of the appraisal report under review. As of the effective date of the work under review there were about 54 active listings and about 3 pending sales in the Fort Bragg Central area with many of them being offered for more than 300 days and some for over two years. This indicates that supply and demand are not in balance and that this is an unstable market. Median price decline of about 23% year over year, 13% in the six months prior to the effective date of the work under review.

The appraisal report under review marked the One-unit Housing Trends check boxes as Stable, In Blance and 3-6 months marketing time (this box should actually be "exposure time" which is not the same as marketing time). The report went on to state in the Market Conditions comment section: "Property values have shown a marked increase over the past several years due to a strong demand and severe shortage of properties offered for sale. More recently the market appears to be stabilizing with supply and demand in balance." This was clearly not an accurate analysis as of the effective date of the report under review and resulted in a misleading appraisal report. With almost 54 active listings at the time and less than 2 sales per month it might take several years to absorb the oversupply if no change in market conditions were to occur. Refer to the statistics noted above and it is clear that the market was not stable as reported in the work under review.
 

Lax1

Junior Member
Joined
Jan 4, 2007
Professional Status
Certified Residential Appraiser
State
Florida
The problem is those are the kind of comments that the lenders want and why some appraisers still get work, however that area is really declining and oversupplied in a big way.
 

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
That's a whacky area. I did one in West Haven where I had to report the market was stable because the declines were less than 2% on a price per square foot average and actually increased slightly in median value. But then did one in Royal Ridge where values were declining at 22%.
 

444nutman

Senior Member
Joined
Jun 20, 2007
Professional Status
Certified Residential Appraiser
State
Florida
That's a whacky area. I did one in West Haven where I had to report the market was stable because the declines were less than 2% on a price per square foot average and actually increased slightly in median value. But then did one in Royal Ridge where values were declining at 22%.
The last stable one I had was over that way and that was in 12/2006. This one is just south of Southern Dunes in the area where all the streets are named after numbers in Haines City. He went to southern dunes for comps. LIke I said he wont be getting anymore work for this company. It just frustrates me sometimes that this guy gets work and I have to struggle. I have done plenty in Royal Ridge. It seems the closer you get to I-4 on 27 and going North all the way to clermont that area is not just declining but a full free fall.
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Would you believe that many of the areas in my market continue to be stable and have 30-180 marketing times? The areas that exploded over the past years (new home developments in semi-rural areas) tend to be the only declining markets we have around here. There are some areas in the city that show declining values and mass foreclosures, but they seem to be only pockets of areas or areas that were already traditionally high foreclosure areas. Funny, high foreclosure areas from 2-3 years ago are practically off the charts now with foreclosures.
 
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