What's the Beef (whatever it is, it is appraisers' fault)?

[TerryRohrer]

Last week, appraisals below contract price were the problem. This week, appraisals above contract price are the problem. Nobody knows nothing except that appraisers' are at fault. Who "deemed" $2,500 as the bench mark for measurement of defective appraisals (apparently whether for a $10,000 mobile home or a $225 million mansion). And a special shoutout to Freddie Mac, whose lack of capacity to conduct honest and objective analysis of real estate data spawned this new industry.

Home-price growth is cooling, leading to appraisal challenges
Appraisals came in higher than sale prices in 57% of transactions in the second half of 2024, up from 53% in the same period a year earlier

January 16, 2025, 12:18 pm By Neil Pierson

"Cleveland-based Corporate Settlement Solutions (CSS) released an analysis Thursday that highlights a growing gap between appraised home values and sale prices. Across the 19 East Coast and Midwest states in which CSS operates, appraisals were higher than sale prices in 57% of transactions during the second half of 2024."

"That share was up from 53% in the second half of 2023 and 51% in the first half of 2024. Properties are deemed “over-appraised“ if the appraised value is $2,500 or more than the sale price. Conversely, they are considered “under-appraised“ if the sale price is $2,500 or more than the appraised value."

“We launched our Appraisal Price-Gap Analysis last year to help the market, as a whole, understand the delta between appraisals and sale prices. Accurate, market-centric valuations are key to a healthy mortgage market, so it will be interesting to see how well appraised values align with market-driven sales prices throughout 2025 as the housing market continues to find its new normal.”

Home-price growth is cooling, leading to appraisal challenges

Corporate Settlement Solutions released an analysis that highlights a growing gap between appraised home values and sale prices.

www.housingwire.com

 

[Terrel L. Shields]

I just appraised some commercial shop buildings - all 3 were exactly 1,500 SF ... 2 sales were 499, 500 DOM from the same seller in an industrial park. 1 more sale was 295 days on market. 5 years ago, they would have sold in 3-6 months in the same area.

 

[alebrewer]

Its interesting that sales price is cited to be the benchmark WRT 'true' value - either WRT over appraising or under appraising. If that truly were the case, though, there would be no reason to obtain an appraisal for purchase transactions. So, the users of appraisal services don't trust sales prices as true value - unless they're comparing those prices to appraisals - which they use to confirm that the sales price is 'true' value. Its a bit like circular insanity.

 

[jay trotta]

Last week, appraisals below contract price were the problem. This week, appraisals above contract price are the problem. Nobody knows nothing except that appraisers' are at fault. Who "deemed" $2,500 as the bench mark for measurement of defective appraisals (apparently whether for a $10,000 mobile home or a $225 million mansion). And a special shoutout to Freddie Mac, whose lack of capacity to conduct honest and objective analysis of real estate data spawned this new industry.

Home-price growth is cooling, leading to appraisal challenges
Appraisals came in higher than sale prices in 57% of transactions in the second half of 2024, up from 53% in the same period a year earlier

January 16, 2025, 12:18 pm By Neil Pierson

"Cleveland-based Corporate Settlement Solutions (CSS) released an analysis Thursday that highlights a growing gap between appraised home values and sale prices. Across the 19 East Coast and Midwest states in which CSS operates, appraisals were higher than sale prices in 57% of transactions during the second half of 2024."

"That share was up from 53% in the second half of 2023 and 51% in the first half of 2024. Properties are deemed “over-appraised“ if the appraised value is $2,500 or more than the sale price. Conversely, they are considered “under-appraised“ if the sale price is $2,500 or more than the appraised value."

“We launched our Appraisal Price-Gap Analysis last year to help the market, as a whole, understand the delta between appraisals and sale prices. Accurate, market-centric valuations are key to a healthy mortgage market, so it will be interesting to see how well appraised values align with market-driven sales prices throughout 2025 as the housing market continues to find its new normal.”

Home-price growth is cooling, leading to appraisal challenges

Corporate Settlement Solutions released an analysis that highlights a growing gap between appraised home values and sale prices.

www.housingwire.com

...........Good Luck

 

[sputnam]

Appraisers are always at fault... and it's our own fault that we are. Instead of developing trade associations and cooperations similar to CPAs, we generally aren't known to play well with others. The public perception of real estate appraisers isn't much better than that of Congress or used care salesmen. Enough of us take whatever fee is offered and accept whatever turn time that is expected and then cut every corner that can be found and then deliver appraisal reports that don't comply with USPAP and/or with the requirements of our Clients.

There are simply too many appraisers who don't aspire to be well qualified professionals. If you think you are among those who are professional, ask yourself... 'When is the last time you did something to raise your knowledge, add to your credentials?'