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If the closest, most like the subject comps are passed by because they are distressed, it's reaching. You can't ignore two sales on the block to go even half a mile down the road, unless those are the only two distress sales in the neighborhood........and even then, they can't be ignored and must be factored in.
This has been the hardest lump for homeowners to swallow in this mess. While foreclosures appear to have slowed, they are still at what we use to consider record numbers just a few years ago and they continue to influence the market. We also know we still have a chunk of inventory to hit the market. Granted, there are fewer vacant homes, but they are still there. As the market turns, regular sales will become the norm and the distressed sales will become a footnote.
Its kind of a hard lump to swallow for many because the very people who helped make things get so bad, appraisers, who happily got paid to do appraisals and all but ignored whether there was any real basis for increasing values like they did and mortgage lenders, who would have given a dog or cat a mortgage are all now trying to suddenly stick to the letter of the rules and it defies logic.
You will have a hard time ever convicing me that some guy down the street that never should have been allowed to buy a $350k house on $60k income and had to fire sale it to get out or let it go, can suddenly knock another 150 houses down in value, at least in a real way. In fake made up value land, sure, but its all based on made up numbers.
]Its kind of a hard lump to swallow for many because the very people who helped make things get so bad, appraisers, who happily got paid to do appraisals and all but ignored whether there was any real basis for increasing values like they did and mortgage lenders, who would have given a dog or cat a mortgage are all now trying to suddenly stick to the letter of the rules and it defies logic.[/b]
You will have a hard time ever convicing me that some guy down the street that never should have been allowed to buy a $350k house on $60k income and had to fire sale it to get out or let it go, can suddenly knock another 150 houses down in value, at least in a real way. In fake made up value land, sure, but its all based on made up numbers.
It's my opinion (and many others') that those responsible for this mess are long gone. The appraisers that performed inflated appraisals were some of the first to go (and prosecuted, or worked for banks that went under). The mortgage brokers that pushed option ARMs or the brokers that took advantage of their own minority group, are long gone. And for the most part, the Realtors that jumped in while the fying pan was hot are history as well.......Of course, the cream did float to the top and we did get see some new industry professionals, but really our numbers have been decimated by huge percentages. Huge. I just went to check the numbers.......mortgage brokers numbered well over 23,000 in 2005. Now they are lucky to hit 8000. Realtors have seen the same kind of drop in numbers.
In 2004, when it was apparent the mortgage business was blossoming, we had pizza delivery guys and hairdressers suddenly become mortgage loan officers. Classes for the real estate license had waiting lists for the first time in decades. And when it all went bust, those that got rich off of option ARMS or speculative property flipping for a quick buck all got stopped right in their tracks.......They had aquired the debt that went with an income of 30K per month......they got stuck with 17 properties bought at the top of the market. Most went on to face their own bankruptcies.
No, I, suggest those, appraisers included, are long gone. Most remaining in the business were here before the boom and bust, but the vultures that swooped in for the quick buck are long gone. For one reason, they can't make "big" money in this market without real work. And, it looks like, they aren't going to get back in real easy, either. They must either complete the education requirements and take an entrance exam or go work for a bank and be put on their mandatory training schedule.
So to suggest the same appraisers that were out there inflating values that weren't warranted are the same appraisers out there today, we'll just have to disagree. Many were policed out by their own organizations or the banks that put up with their shenanigans closed up and they couldn't find work. As for others, I personally know dozens that fought hard for the appraisal independence legislation, only to be shot in the foot because now they have to get work through an appraisal management company and take a pay cut for the same work. There were many appraisers that turned in their own for playing the inflate the value game, a couple started message boards to report appraisers for misconduct and others went on to advise legislators.
So, you see, what you see on the outside is not what we see on the inside. I see honest people that never gave up their ethics now being punished for sins of others.
Its kind of a hard lump to swallow for many because the very people who helped make things get so bad, appraisers, who happily got paid to do appraisals and all but ignored whether there was any real basis for increasing values like they did and mortgage lenders, who would have given a dog or cat a mortgage are all now trying to suddenly stick to the letter of the rules and it defies logic.
You will have a hard time ever convicing me that some guy down the street that never should have been allowed to buy a $350k house on $60k income and had to fire sale it to get out or let it go, can suddenly knock another 150 houses down in value, at least in a real way. In fake made up value land, sure, but its all based on made up numbers.
Fake made up land was five years ago, when that house and the others around it were worth $350k, because easy financing allowed the $60k incomes into that market. We are reverting back to realistic values land, where properties are reverting back to what they are actually worth. You can't ignore distressed sales when they make up 50% of the market.
Quote:
Originally Posted by Lacerta
I am totally aware that many people are overestimating the value of their homes these days. Sellers are not realistic on what their home is actually worth. I see it every day too. But I'm not just making a personal judgment. I'm getting my numbers from real estate agents who have been in the local market for almost 20 years. They are very familiar with the local market and they agree my house would sell for substantially more than these comps support. Other nearby comps support that opinion.
But didn't you mention that the real estate agents were your parents? There is going to be a little bit of bias there.
But didn't you mention that the real estate agents were your parents? There is going to be a little bit of bias there.
Yes, they are my parents. If you knew them, you would know that all that means is that they are brutally honest about it with me. If the value wasn't there, they wouldn't feel any compunction about telling me so. They have told my sister recently that her house isn't worth what she thinks she can sell it for.
I guess my problem with the appraisal is that I don't feel that simply taking the comps that are nearest in location gives you a fair assessment of the comparable market. Good comps in my area ranged from around $98k to around $118k. Most were selling around $110k-$112k. It was just dumb luck that the ones nearest to me were at the low end of the range. They sold very quickly, indicating that they were underpriced for the market. Shouldn't a fair appraisal take these facts into account?
If you take a fair sampling of good comparables, and throw out the high and the low and average the rest, how is that a less good appraisal than simply looking at the comps closest in proximity and ignoring all other factors?
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