aprazer
Junior Member
- Joined
- Feb 27, 2002
- Professional Status
- Certified Residential Appraiser
- State
- New York
Some clarifications-
Jtrotta-Yes the market has been climbing for the last few years, but has really taken off this year. More sales that cannot be justified than previous years. People are buying and/or renovating at numbers that don't appear to be justified. The buyers are also not "old money", they are amazingly young for the amounts being spent. Ten years ago, it was rare to find a multi-million buyer under 50. Today, they all are under 50-55. Plenty in their 40's. True old money types don't do this sort of thing, at least in this area. Old money people don't spend money like this. And they don't mortgage themselves to the limit.
Chris Poklacki-The guy who spent a total of 1.125 Mil is not a builder. Thats the point. He spent an unreasonable amount on a house that the market should not justify, but he has been offered even more than what market value is. He is building for himself, and is inundated with offers to sell before the house is even completed, and is also not listed with a broker. If he waits another 6 months he will propbably get what he spent.
I agree that some of this can be blamed on appraisers. I met another appraiser at a high end property-when we began to generally discuss market conditions-she said-"well it has to be worth whatever they agreed to". Yikes. It is so much easier to inflate a high end appraisal-if you are that type of appraiser. There are plenty of areas where the value range on the same street can be 1.5M to 3.5 M. If the subject is worth 2 Mil, but you start with 3 Mil comps-the value is way high, but the report looks "reasonable". The high end always goes down first, and some lenders are going to take a big hit.
There is no fear in this area of anyone taking your license. NY state is a minimal enforcer of the rules. The licensing department that regulates appraisers also regulates security guards, hair dressers, alarm installers, armored car guards and other fields. The same people are in charge of all these fields. What a joke. I was recently informed that there is one inspector in charge of the entire metropolitan area-thats a population of about 12-14 Million people. Also-no appraisal experience prior to state licensing for that one individual.
Jtrotta-Yes the market has been climbing for the last few years, but has really taken off this year. More sales that cannot be justified than previous years. People are buying and/or renovating at numbers that don't appear to be justified. The buyers are also not "old money", they are amazingly young for the amounts being spent. Ten years ago, it was rare to find a multi-million buyer under 50. Today, they all are under 50-55. Plenty in their 40's. True old money types don't do this sort of thing, at least in this area. Old money people don't spend money like this. And they don't mortgage themselves to the limit.
Chris Poklacki-The guy who spent a total of 1.125 Mil is not a builder. Thats the point. He spent an unreasonable amount on a house that the market should not justify, but he has been offered even more than what market value is. He is building for himself, and is inundated with offers to sell before the house is even completed, and is also not listed with a broker. If he waits another 6 months he will propbably get what he spent.
I agree that some of this can be blamed on appraisers. I met another appraiser at a high end property-when we began to generally discuss market conditions-she said-"well it has to be worth whatever they agreed to". Yikes. It is so much easier to inflate a high end appraisal-if you are that type of appraiser. There are plenty of areas where the value range on the same street can be 1.5M to 3.5 M. If the subject is worth 2 Mil, but you start with 3 Mil comps-the value is way high, but the report looks "reasonable". The high end always goes down first, and some lenders are going to take a big hit.
There is no fear in this area of anyone taking your license. NY state is a minimal enforcer of the rules. The licensing department that regulates appraisers also regulates security guards, hair dressers, alarm installers, armored car guards and other fields. The same people are in charge of all these fields. What a joke. I was recently informed that there is one inspector in charge of the entire metropolitan area-thats a population of about 12-14 Million people. Also-no appraisal experience prior to state licensing for that one individual.