You are on page 1of 3

4/5/2011

The Reason For Some Greater Baton Ro…

Join 205,226 professionals on the world's largest real estate network — freeSearch RainCamp Groups Blogs Channels States Login Home : Blogs : William D. Cobb FHA Home Appraiser : Baton Rouge Real Estate News

The Reason For Some Greater Baton Rouge Low Appraisals?
http://www.batonrougerealestatetrends.net/ - Are Greater Baton Rouge Home Sales Stalling In The Under $140K Range? This is a post below I made to the Baton Rouge Real Estate Buzz Facebook Page Group on April 4, 2011.

William D. Cobb FHA Home Appraiser Baton Rouge, LA More about me… Accurate Valuations Group Office Phone: (225) 293-1500 Cell Phone: (225) 953-0638 Email Me Baton Rouge Louisiana Home Appraiser Providing Local Real Estate News And Opinion. Baton Rouge FHA Appraisers ABOUT AVG:

I'm noticing a trend in the $100K to $140K range where home sales have slowed, if not stalled. I'm reading about mortgages drying up for some. I'm looking at a 1004MC or Market Conditions Form right now in 70810 Area 53 where 12 months ago there were 17 sales and 2 months supply and in First Quarter 2011 only 1 sale in current 3 month quarter and 49 month supply. Of course, Baton Rouge home sales aren't totally stalled for all price ranges, but for the under $140K range, there certainly has been a slowdown and increase in supply. Here's the recent examples below. This 1004MC or Market Conditions Report Based On Sub-Market Solds and Listings For an overbuilt home in Hermitage Subdivision, but using 1,200sf to 2300sf lowered price homes as comps in Area 53. From 17 sales 12 months ago to only 1 in current 3 months. Months supply of inventory 12 months ago was 21 months and currently it's 48 months. Median sales price appeared to remain stable. It actually increased, BUT trend is not called just based on 1 sale. activerain.com/…/the-reason-for-some-…

1/4

4/5/2011 increased, BUT trend is not called just based on 1 sale. For Some Greater Baton Ro… The Reason actually

GREATER BATON ROUGE PRE-LISTING APPRAISALS EXPLAINED BY VIDEO:

SAME TREND IN DENHAM SPRINGS FOR 2 HOMES. I saw this exact same trend in Denham Springs last week. A couple purchased a home for $141K in 2007, surely a Post Katrina high price, and it appraised in low $130s in 2011 due to expected market correction. There was going to be a correction! 1004MC or Market Conditions Data showed 8 sales and 9 month supply 12 months ago and only 2 sales and 36 month supply in current 3 month period. In this case, median sales prices had declined, corrected. This 1004MC Based On Sub-Market Solds and Listings For a 1,500sf 40 yr old home in South Woodcrest Subdivision. From 9 sales 12 months ago to only 1 in current 3 months for past 2 quarters. Months supply of inventory 12 months ago was only 4 months and currently it's 45 months. Median Sales Price was $128,450 12 months ago and is now $124,125, a dip of -3.4%. Also, the Median Sold Days On The Market increased from 76 days 12 months ago to 191 in Q1 2011 .

NEED TO APPEAL YOUR LOCAL PROPERTY TAX ASSESSMENT?

This 1004MC or Market Conditions Report Based On Sub-Market Solds and Listings For a 1,150sf 40 yr old home in Sara Estate Subdivision. From 9 sales 12 months ago to only 1 in current 3 months for past 2 quarters. Months supply of inventory 12 months ago was only 4 months and currently it's 45 months. Median sales price appeared to remain stable. The Positive In The Market! I do know there is a lot of positive chatter from local Real Estate Agents on FB on the uptick in home buyer interest....and that's a positive for the market.

EASTERLY LAKES 2010 UPDATE:

$100 DESKTOP HOME APPRAISALS – FOR CREDIT UNIONS, CPA’S – NOT FOR

activerain.com/…/the-reason-for-some-…

2/4

4/5/2011

The Reason For Some Greater Baton Ro…
MORTGAGE LENDING!

PART OF THE REASON FOR "LOW APPRAISALS". As home appraisers, the Big Banks are really concerned about Collateral Risk and want to know much more about the markets they lend in from the home appraisal. This is why today's home appraiser works a couple of hours longer on each report to deliver all of this extra data, to better understand the markets they operate in and apply market based adjustments, whether those adjustments support a purchase agreement or not. Stats like I'm reporting here aren't obvious on the surface when it comes to pricing a home for a listing BUT are made more transparent at appraisal time. Such stats as 45 months supply, declining median sales prices and average days on the market of 191 days do influence the final outcome on an appraisal and helps the lender make the decision as to if they are going to take the risk to lend in a market. Underwriters can choose to "cut" the appraised value. In my opinion, sometimes a "Low Appraisal" isn't really a low appraisal but more of a reflection on the reality in that market at that time period. And, that period of time could be months and months after that Agent's sign went into the ground in front of that home. Markets Change! After all, if the market indicators above in the 1004MC were known to only the Appraiser and not known by the Agent marketing the home, then can you now see how and why appraisers are armed with more knowledge of market interaction? And, in the case where median sales prices were declining, can you see how that if this is not known by listing agents the trouble this causes at appraisal time? This is the newer depth of market analysis we appraisers are seeing in the markets we operate in AND the market analysis the average real estate agent is not seeing in the same market. Can you understand now why Fannie Mae, Freddie Mac, FHA, RD, VA and Banks want appraisers looking at these numbers more closely? I as a home appraiser certainly can. Sometimes low appraisals happen because the overpriced listing was based on what the seller wanted versus pricing that home based on market support. Sometimes low appraisals happen because the home wasn't properly measured and may be smaller than stated. Sometimes low appraisals happen because excessive seller paid concessions were not deducted from the comps used by Agent to establish the listing price. Fannie Mae instructs appraisers to deduct excessive seller paid concessions and expects Agents to do the same at listing time. And, when the comps or solds used in the appraisal state seller paid concessions of $6,000 to $8,000 to $10,000 to $12,000, then those excessive concessions will be deducted from those comps. If typical is $3,000, then in the example above, -$3000, $-5000, -$7,000 and -$9,000 will be deducted to bring these comps back down to market normalcy! Fannie Mae, FHA and lenders know that when there is no "skin-in-the-game" or downpayment, they are more likely to get that home back. And, there are some P.A.'s written to utilize excessive seller paid concessions to get people into housing. It's as if the regulations are asking the appraisers to help correct this situation in the market. A Decrease In Mortgage Lending In These Price Ranges? Is there a decrease in mortgage lending in these price ranges or just harder to qualify for a mortgage loan....or both?

Recent Visitors

Feedjit Live Blog Stats

Listings

Links Baton Rouge Home Appraisals Baton Rouge Real Estate Appraisers

Archives April 2011 (2) March 2011 (15) February 2011 (14) January 2011 (27)

Posted by William D. Cobb FHA Home Appraiser on 04/05/2011

baton rouge real estate, baton rouge homes, baton Comments (0) rouge housing, baton rouge home appraisers, baton

activerain.com/…/the-reason-for-some-…

3/4