A Third Wedding, A Birthday, An Anniversary and a House

It’s the week before what I have dubbed the third quarter market report gauntlet when real estate firm Douglas Elliman publishes our 30+ housing market research. This coming Tuesday the first report to go live covers the Manhattan sales market. It promises to be a good read. But before I make it to Tuesday, I have to celebrate a few things:

1) My third oldest son’s wedding (as you are reading this note)
2) My birthday
3) Our company’s 32nd anniversary
4) And most importantly, our company’s fiscal year-end

Incidentally, the son (3rd oldest of 4) who is getting married on Friday could solve the Rubik’s Cube in a little over a minute, but I am completely clueless how to do that myself. But I have jumped out of a perfectly good airplane in my youth and thankfully lived to advise you not to do that…let alone solve Rubik’s Cube while free-falling…

I’m hinting here..these Housing Notes are going to be a little light this week.

but I digress…

Annual Income Required To Buy A Home by City

If only I could live in OK but be paid a New York wage. Sigh. Incidentally, the $103,235 required for New York City would be about $20,000 short if you instead wanted to rent a 1-bedroom apartment in a newly developed Manhattan building. Housing costs in the other four boroughs bring the average down.

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NAR: 2018 Profile of International Transactions in U.S. Residential Real Estate

Since linking country of origin to real estate transactions is a no-no in U.S. real estate due to fair housing and redlining laws, unlike much of the world, the best resource we have, unfortunately, is an NAR survey: Profile of International Activity in U.S. Residential Real Estate

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(For earlier appraisal industry commentary, visit my old clunky REIC site.)

38% Increase Into The Profession in Three Years

The following stats from The Appraisal Foundation shows a rising number of people entering the appraisal profession. The projected number for 2018 represents a 38% increase over 2015.

The propaganda being fed to regulators and the users of appraisal services is misrepresenting the state of the profession. To my loyal Appraiserville readers, please let me know when you hear a speaker convey the declining trend story in a public forum so we can inform them.

Indirect Appraiser Pressure of The Daily Kind

An appraiser shared this email from a mortgage underwriter:

“I saw you called a few days ago and I apologize as I have been very busy. If you can just email back notes as to why your not changing value or you can input notes into the appraisal. This can give the borrower a better understanding why the appraisal is low. If your updating value; that is find too.”

My response to the appraiser:

“Good grief. The Appraisal already explains why the value is the value in the report to your client – the bank. The lender is the one to explain to the borrower if they choose to. It’s not on you. Consider charging a consulting fee to make that explanation.

This is what I call the-clueless-19-year-old-chewing-gum-on-the-phone-syndrome.”

The appraiser who sent this to me saw the deeper meaning referring to all the typos and lack of response:

“We are a society and culture in adult age with no more education and teaching than a text messaging two year old.

Now dear Appraiserville readers…imagine being delivered this crap multiple times a day. How can appraisers not be jaded and serve up a lot of righteous indignation when having these conversations? Who stands up for appraisers who go through this?

Fannie Mae plans appraisal waivers for high-needs rural loans

Here’s the logic. To avoid requiring the borrower from making costly repairs, but still reduce the risk of loan performance, Fannie plans to waive the appraisal but order a home inspection.

Translation: Defining the cost of repairs is more important than understanding the value of the loan collateral.

Good grief. This makes no risk management sense unless the taxpayer was willing to pay for this in the future if something goes wrong. Fannie is so worried about a few extra days (or weeks) with a rural appraisal in the loan process in the context of a 30-year loan period that it overpowers the need to assure the value is supported.

Fannie Mae plans appraisal waivers for high-needs rural loans [NMN]

Appraiserfest in San Antonio is a Happening AND its happening on November 1,2,3!

Can’t wait!!!

OFT (One Final Thought)

Like Warren Miller’s classic ski movie “Steep and Deep” – ok not really, but who doesn’t love a good 70s/80s Warren Miller ski movie? Nobel economic laureate Paul Krugman wrote “Steeper Versus Deeper (Wonkish):Did finance cause the Great Recession, redux.

Brilliant Idea #1

If you need something rock solid in your life (particularly on Friday afternoons) and someone forwarded this to you, or you think you already subscribed, sign up here for these weekly Housing Notes. And be sure to share with a friend or colleague if you enjoy them because:

– They’ll be wedded to their ideas;
– You’ll be more wedded to things;
– And I’ll continued to remain wedded.

Brilliant Idea #2

You’re obviously full of insights and ideas as a reader of Housing Notes. I appreciate every email I receive and it helps me craft the next week’s Housing Note.

See you next week.

Jonathan J. Miller, CRP, CRE, Member of RAC
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog

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