Quick questions from a non-appraiser

[Lee Lansford]

What are the standards for determining if a market is declining/stable/increasing and also for if a neighborhood is "balanced" in the number of homes on the market, etc.?

I am evaluating an appraisal for a home in a distinct gated, vacation community with 75 properties. 20+ are for sale, 1 sale in the past 18 months, most on the market 100+ days and most asking prices have declined 15-25% in past 18 months.

Appraisal calls this Stable and Balanced.

Thanks

Well, for starters, there is a tremendous over-supply what with 1 sold in the past 1.5 year and 20+ for sale. Classic economic theory tells us that over-supply is accompanied by declining prices (or, is a harbinger of coming decline).

Lacking sales for a sales price trend, the declining price trend in asking prices is instructive and not unexpected given the other information provided.

"Stable and Balanced"? I don't think so.

 

[redfish]

What's your background? Are you competent to "evaluate" an appraisal?

This is a stupid question.

Eric is a hard money lender that actually reads an appraisal and then relies on that appraisal to make a lending decision.

 

[Smokey Bear]

You're in the minority. Most users of appraisals want the number that will make their deal work be it a broker, realtor, or homeowner.

Ding Ding! BTW, unless you ordered the appraisal yourself, and are named as the client, I wouldn't rely on it to make your decisions. The appraisal is intended for the lender, regardless of whether you paid for it. It is to help them make a lending decision. Period. It is not intended to help the buyer make a buying decision. For that you need to get your own appraisal, which would be on a different form (or a narrative) and written for a layperson, not an industry insider.

 

[Smokey Bear]

Well, for starters, there is a tremendous over-supply what with 1 sold in the past 1.5 year and 20+ for sale.

Depends on whether the sample size was sufficient to determine market trends. If it is limited to the subdivision, this might indicate what's going on in the subdivision (poor construction quality, or overpriced or whatever). But without knowing the market boundaries (vs. the neighborhood boundaries) and the sample size, we can't determine trends from the limited info you've provided.

 

[redfish]

What's your background? Are you competent to "evaluate" an appraisal?

Eric is a hard money lender, he is actually making a lending decision based on the appraisal that he is looking at. Your question is unnecessary at best.

 

[Delta85]

This is a stupid question.

Eric is a hard money lender that actually reads an appraisal and then relies on that appraisal to make a lending decision.

What? How am I suppose to know who Eric is and what his background is? I see you are from Michigan. Do you know Bill?

This was a non appraiser saying that he was "evaluating" an appraisal so I asked what his background was since he was posting with questions as to how to interpret some of the data. Sounds like a solid question on my part.

 

[Mike Kennedy]

This is a stupid question.

Eric is a hard money lender that actually reads an appraisal and then relies on that appraisal to make a lending decision.

Lighten up there Redgills:

Given Eric3 has a blank, General Public profile, 8 posts to date, and no other comments as to why the OP is "reviewing" an appraisal - the question posed is valid. You may know who he is - others, including me have no idea.

 

[Ariba]

Lighten up there Redgills:

IMHO, Redgills post is right on.

What's your background? Are you competent to "evaluate" an appraisal?

 

[Delta85]

IMHO, Redgills post is right on.

Who is this Eric person we are all suppose to know and respect? Was his background detailed somewhere in this post prior to my asking the question? I did not hear his name tossed around at my 7 hour USPAP class recently.

Must be a real power player in the biz and I've just been out of the loop.

 

[Ariba]

Who is this Eric person we are all suppose to know and respect? Was his background detailed somewhere in this post prior to my asking the question? I did not hear his name tossed around at my 7 hour USPAP class recently.

Must be a real power player in the biz and I've just been out of the loop.

What is wrong with Eric's question? Why the hostility? Is there anywhere where he asked you to know or respect him? I have no idea what you mean by your USPAP reference.

What are the standards for determining if a market is declining/stable/increasing and also for if a neighborhood is "balanced" in the number of homes on the market, etc.?

I am evaluating an appraisal for a home in a distinct gated, vacation community with 75 properties. 20+ are for sale, 1 sale in the past 18 months, most on the market 100+ days and most asking prices have declined 15-25% in past 18 months.

Appraisal calls this Stable and Balanced.

Thanks