• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

State Realtor Assoc predicts good market!

Status
Not open for further replies.

Pat Butler

Thread Starter
Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
Just read through a misleading article in our state board of realtor's magazine. They did quote one professional who had a gloomy outlook of the near future, but their quotes from presidents of the assocs here in ILL were ridiculous. They all pretty much said the same thing that the worst is behind us.

Here in ILL it takes a minimum of 7 months to foreclose on a property, and a year to year-and-a-half is more typical. So any defaults that started in 2007 won't likely result in an REO property until 2008 or 2009. It's just beginning to get started! Not only that, but inventory levels are extremely high with extremely long marketing times. None of the people in the article mentioned any of these facts. It's ridiculous to think the the market is already on an upswing.
 

Stephen J. Vertin MAI

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Illinois
I got this letter from ICAP this morning:




<SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: Arial"><EM><FONT color=red>Good afternoon ICAP’ers,
 

Stephen J. Vertin MAI

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Illinois
Pat: Got a letter from ICAP this morning. It said:


Good afternoon ICAP'ers,

I get the opportunity to review a lot of appraisals serving on the Licensing Board. I am amazed at how many residential appraisers are not analyzing current market conditions in the neighborhood section on the Fannie/Freddie forms. Appraisers are still saying:

“Property values are currently stable”,

“There is no oversupply of homes at this time”,

“Marketing time is still less than 90 days”.

To quote one of America’s foremost legal experts, Judge Judy “that’s baloney”.

Your local MLS is probably the best source for this information, but we have posted other helpful websites on the ICAP links page to give you additional support for your findings.

Since I do not do single family homes I thought I would check my market using ICAP's advice. From 1/1/06 to 1/1/07 there were 508 single family homes sold in Oak Park. The average marketing time was 80 days and the average selling price was $519,082. From 1/1/07 to 1/1/08 there were 522 single family homes sold in Oak Park. The average marketing time was 105 days and the average selling price was $521,955.

The moral of the story is you can believe everything you read.
 
Last edited:

OSU Beavers

Elite Member
Joined
Jan 10, 2007
Professional Status
Licensed Appraiser
State
Oregon
Ahh, that Sunshine feels better than Preparation H.
 

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Stephen,

I did some of that same type of analysis recently and came up with similar results in certain sub-markets in Charlotte. I predominately stayed in sub-markets that would have very little sub-prime borrowing. The news is that the Charlotte area is doing very well.

Now, when I looked over predominate sub-prime borrower sub-markets the news was what I expected. Some neighborhoods home prices appear to have collapsed. Funny thing, though, these houses seemed to be selling now at what I would say is a normal price per square foot comparable to building new minus depreciation. That meant the prior sales were inflated 20%-50% and even higher.

The market is in a state of Flux. The politicians have not done there magic yet, so who knows whats going to happen. It is way to early to say.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
General market conditions in the region may not track specifically targeted areas. We have a tri county region that is one MSA basically, throwing in a few towns in SW Mo to boot. But on a county by county basis you can make the case that Market is "up" in Benton Co. ,"down" in Washington...but, there are higher inventories in Benton county, more bankruptcies, & higher avg. prices because they are bigger homes and the builders are desperate to move 'em. They are moving BIGGER houses...In both however, market sales have fell 20%. The median price and average prices are are divergent.

The top end homes are the dogs. So long as unemployment doesn't hit hard, the "cheap seats" are still holding up sales wise.

If I want to check whether the market is up or down, I go into the area and then check price per Square Foot...and in all our newer houses across the board I am finding $/SF is falling...not a big fall but falling.
 

George W Dodd

Senior Member
Joined
Jul 9, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Stephen,

The devil is in the details. Statistical information may not tell the entire story. How many active listings are there currently on the market? How does that related to the approximate number of sales per month? If in the past year the market is 43.5 homes per month and there are 500 listings wouldn't that indicate a problem? Also, what was the average size home that was selling in 2006 at $519k? How does it compare to the current.
Also, the change in "average market time" from 80 to 105 days reflects an increase of 31% which could be significant.
I'm just saying.
 

Stephen J. Vertin MAI

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Illinois
Carnivore:

I do not believe the worse is behind us but I do believe we are at the bottom and it is a good time for long term investors to buy. I saw a lake cottage near Grand Rapids (nice little vacation home) listed for $112,000 on an acre of land. I have been thinking of buying. I think the time is right. The Fed has pumped $100 billion into the credit markets and most likely they will cut rates a 1/2 point at the next meeting based on unemployment increases and manufacturing declines. They are not going to let the country fall into recession with the coming election. Watch.

Anyway you have the doom and gloomers on the appraisal side and the sunny sky realtors on the other. I believe the actual market is somewhere in the middle. Late spring things will pick up in a number of markets. It is a simple matter of economics.

Between 2002 to 2004 we had the bubble string on the forum. It was hundreds of post predicting when the bubble would burst. Do you remember that? Watch, appraisers are pessimist. We will never have a long "market is recovering" string. What goes up comes down and what comes down goes up. Buy low sell high always makes you the rich guy.
 

Stephen J. Vertin MAI

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Illinois
George:

What you are saying could possibly apply to sample sizes in markets with substantial variations but this is not the case. I am comparing the complete population of sales in a relatively homogenous market to another complete population of sales with the major variable being time. While there maybe a margin of error of 3 percent, it will not be going much further bud.:new_smile-l:

My home town is in contradiction to ICAP's letter. Maybe there are others. I do not know.
 

CCAAMO

Senior Member
Joined
Sep 17, 2007
Professional Status
Certified General Appraiser
State
California
Carnivore:

I do not believe the worse is behind us but I do believe we are at the bottom and it is a good time for long term investors to buy. I saw a lake cottage near Grand Rapids (nice little vacation home) listed for $112,000 on an acre of land. I have been thinking of buying. I think the time is right. The Fed has pumped $100 billion into the credit markets and most likely they will cut rates a 1/2 point at the next meeting based on unemployment increases and manufacturing declines. They are not going to let the country fall into recession with the coming election. Watch.

Anyway you have the doom and gloomers on the appraisal side and the sunny sky realtors on the other. I believe the actual market is somewhere in the middle. Late spring things will pick up in a number of markets. It is a simple matter of economics.

Between 2002 to 2004 we had the bubble string on the forum. It was hundreds of post predicting when the bubble would burst. Do you remember that? Watch, appraisers are pessimist. We will never have a long "market is recovering" string. What goes up comes down and what comes down goes up. Buy low sell high always makes you the rich guy.

Maybe in Illinois but not in California. All you need to look at is the medium income for a given area vs. the home prices in those area to see it is still a long way to the bottom.

Another way to look at it is to compare the market rent for a home vs. the PITI. In many areas the rent amount is 1/2 the PITI.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks