Order Volume

[Zoe]

My commercial property is across street from vacant Walgreens. Walgreens rather sublease than keep open that store.
Paying employess, paying utilities, and loss from shoplifters cost more than just paying rent on a vacant unit.
Wished the store will be rented. It's an eyesore.

Yeah, but they will the pay bank. That's fine. They probably had a long term mortgage with rate lock. How long they been there?

Income cap approach probably did their appraisal on long term mortgage. They just broke their lease and paid the bank.

They probably had like 5 year or 10 year rate lock.

Is it foreclosed on? Don't worry. Somebody will buy it and they know it. It just won't be Walgreens anymore.

Idk. They could have been on floating rate with Fed funds rate. Like 1 year rate lock. Idk. But I imagine it will sell quickly and walgreens will be in charge of the sell. It won't be the bank.

It probably cost Walgreens to buy out of the lease.

 

[J Grant]

I have been in the DFW market for 30+ years. This is the slowest I have seen it in a long time. I have had more assignments canceled because the borrower backed out in the past month than I have had in the past five years. I read there were 3200 homes in default in DFW in the first six months of 2023, but I have had relatively few REO assignments.

Idk, we may see some REO assignments trickle in but I doubt that there will be a large # of them - banks are trying to avoid seeing properties go into default and will work on a short sale or loan rework if they can - even if it goes into default whether lenders/clients would want a traditional REO appraisal done is too soon to tell-

 

[Zoe]

What do you want across from your property Fernando? You could buy it? Lease it out?

Call somebody at Walgreens. You will have to do some major tenant improvements in the lease.

 

[Zoe]

Idk, we may see some REO assignments trickle in but I doubt that there will be a large # of them - banks are trying to avoid seeing properties go into default and will work on a short sale or loan rework if they can - even if it goes into default whether lenders/clients would want a traditional REO appraisal done is too soon to tell-

I don't think FED will let that happen again unless a major catastrophic event. I think FED will buy the property before they let GSE or banks get it back and sell it and hire the appraiser to sell it on MV opinion. They will probably hire local agents on commission.

 

[Zoe]

Have to remember who insures banks and loans and gses

 

[Terrel L. Shields]

That volume of REO work will not be there this time, for a number of reasons.

I am not prescient enough to see the depth of the market plunge in the future...but I have not discounted REO work. Credit card debt is high. Car payments are high (you can live in your car but you cannot drive your house to work.) So the ultimate volume of REOs and the need for banks to value their own properties will provide some work.

Step one is to see if a lot more (regional) banks fail. They are the heart of the matter. They lend and we need a lender of last resort when the markets collapse. With out huge national debt skyrocketing, we are approaching the time with tax takes will not even service the interest on that debt. Then what? There is a suggestion we tax a chunk off the top of the 5% richest people in America. Sorry but if you took 100% of it, it still wouldn't be a drop in the bucket.

Residential market is still so much better than commercial market.

True enough in rental property. Here, a high percentage is not leased but owned by a retailer or office for a small business. Meanwhile, Walmart still wants the vendors handy so they have vendor space in Bentonville. Not hurting here...yet. But neither is the market for houses. Building like mad in NW Arkansas.

 

[Essexfenwick]

It’s the end of an era. fund rates from 0 to 5.5 and going up slowly to save the currency. By the next boom the clients/people/system will be different. This re-set of the monetary environment is the lowest volume I’ve had in 38 years (forever). It’s not just us. The entire economy has been supported by low rates and all investments were influenced by low rates. The dollar itself is incrementally losing its reserve power which allows the USA to be a cubicle working Starbucks drinking population and not a hard working pollution breathing, dying younger population. A 5.5 percent (normal) Fed funds rate will break the economy and the federal solvency so what’s going to happen? Many directions possible .. none good. Hyper inflation if they start up QE 6 and force rates down… depression if they allow the market to set rates.. decades long malaise stagflation …Global war to obfuscate and blur cause identity.

In the last 4 months 1.5 trillion in debt and during an economy the MSM keeps repeating is “strong”. Where is the tax revenue?

 

[Joe Flacco]

This winter is going to be very slow. Probably will be slow for many years. Even if rates drop to 5-6% there still won't be many refis. Only people that bought recently.

 

[ZZGAMAZZ]

I would assume anybody still active in this field is worried about a decline in business. I personally don't see a rainbow around the corner as monetary and fiscal policy are at odds with each other and that coupled with a jittery bond market and a decline in consumer wealth and purchasing power usually forecasts weakness. It will take some time for buyers and sellers to adjust to the new environment so don't expect much improvement in 2024, maybe by 2025 things will improve with different policy decisions implimented.

That having been said, of my most recent 25 residential purchase appraisals, in the Inland Empire section of SoCal, maybe one property has been listed for more than 10 days. I can't figure out how or why minimal exposure doesn't correspond with dramtic weekly increases but every market is stable with only a marginal upwards pressure--and of course half of the sellers are moving to Texas or Tennessee.

 

[MckinneyGuy2023]

I have been a certified residential appraiser for over 20 years and work has never been this sparse. Order volume is at a crawl in recent weeks and I am just curious if anyone else is as worried as I am.

Same here in the DFW area. I am also worried.