Real Estate Valuations and Appraisals


Here’s an odd statistics, the August 2012 new home sales of 373,000 units slipped 0.3% in a month on month basis but, that’s only because the July figures were adjusted upward to 374,000 units. The movement since January 2012 is up 25.9 % in August. Also, according to the research and tracking of MDIF, Amanah Investment Bank Bhd the median price of a new house increased a record 11.2 % m-o-m in August to $256,900. The August increase is at the highest level since March 2007. The August increase was y-o-y 17% higher.

Fed Reserve Chairman, Ben Bernanke stated that when home prices rise, Americans feel wealthier. As we un- derstand it, this is what promote spending for a multitude of items which spurs inventory growth and jobs. Bernanke was supported by Sal Guatieri, a senior economist at BMO Capital Markets when saying, “We have a real housing recovery taking root and that has positive implications.”. However, there is a consensus that the labor market must also improve to add impetus to the housing recovery. They do work hand in hand. This is the rationale that the purchase of housing will create need for a variety of then related items, which can add impetus to the job market.

A study by IBM Smarter Commerce supports the previous statement we made. There is a marked increase in home improvement sales thus, Bernanke’s position of American’s feeling wealthier when new home sales are up may be absolutely on the money.

GSE- The Government Sponsored Enterprise (GSE), being Fannie Mae and Freddie Mac have completed about 129,000 foreclosure prevention actions in the second quarter of 2012. This brings the total since 2008 to 2.4 million, Please note it doesn’t say they did it successfully, they just brought it to a conclusion. You gotta love political rhetoric. Supposedly the two agencies completed 50,373 loan modifications, 36,496 home for- feiture actions, most being short sales and 36,343 repayment plans. Unfortunately, those I know trying to get modifications and short sales complete have been unsuccessful and / or are still waiting for nearly 3 years.

HOMEOWNER’S INSURANCE- A book can be written about this and probably has. It is seriously suggested that each of us do some research to see what is really covered. If you have a dog on the “no-no list”, a dog bite likely won’t be covered. If building codes require you update your house if repairing damage, it may not be covered by your insurance. Make a list of concerns and please do you homework. You will find unsettling results that you need to change or add with a rider. Al- though many situations may be covered you need to keep reading. If your pipes freeze and burst during the winter in your vacation home, you may not be covered if you did not take provable steps to have avoided the problem. And if your house is totally destroyed by fire you will find the coverage is for the depreciated cost of the improvement excluding the foundation. Ouchhhh!

SPACE SAVING TO THE UMPTEEN DEGREE- This bathroom is in a 375 square foot apartment in Sweden. This is ingenious and does provide all necessities in a very limited space. Hey, you gotta do what you gotta do!

AND THE RACE IS ON!!- It’s on to the final month of tax appeals, at least for county ones. The state ap- peals go on and on and on, etc! Speaking today to one of the very astute and highly respected participants in the process, I was told that everyone in the process from tax assessor’s staff to the attorneys handling appeals are totally drained. Tempers are being lost and the process is bastardized by inexperienced appraisers and at- torneys; and yes, less we forget by those attorneys who are trying to pay for their kids college educations in just this one season. Sad, isn’t it, but so very true. Hey, this doesn’t mean that all those involved are fall into those categories. Some of the appraisers and attorneys are fantastic. They are most importantly conscientious and are professionally prepared and driven. These are the ones whose clients get fair treatment with the least out of pocket costs. One attorney with whom I negotiated appeals in the last couple of weeks said, that hiring appraisers with each appeal is over. The explanation was that most of the time the reports were not defensible. This attorney is one of the most informed and honest ones with whom I’ve had the pleasure of negotiating. This attorney goes to each of the properties and does the homework to be very well informed and prepared. It’s great working with this person. I only wish that this attorney could be cloned. The whole system and all parties would benefit enormously.

The attorney for the municipality with which I work is absolutely fantastic. The professionalism is unequaled and the command the attorney has of real estate is astounding. This person is better at real estate than most appraisers I know or have encountered in the years. So, I guess it may be safe to say, that the system may not be at fault….the participants at various levels are the real problem. The public is also a problem but it’s be- cause they are not well informed; and, how can we expect them to be when there are inept participants giving them advise. One of the attorneys for whom I have a lot of respect said, “How can we tell a client that the pro- fessional they hired is inept. After all , the credentials are in place.” He’s right.