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NEWZ://House for sale-set to explode/Apps up 9.5%/Skyscraper builder forgot elevator - March 19, 2015
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A few good "how to" appraising articles

 

Mobile, Manufactured, or Modular: You Can=t Judge a Book by its Cover

By Richard Heyn, SRA and Dawn Molitor-Gennrich, SRA

 

Excerpt:

The first rule of appraising factory-built housing is to know what you=re appraising. Under the general umbrella of "automated housing" are mobile, manufactured, modular, panelized, pre-cut, pre-fab, and kit homes. Only the first three, mobile, manufactured, and modular, are true "factory-built" homes that are more or less "fully finished" in a factory.

 

http://www.aciweb.com/mobile-manufactured-or-modular-you-cant-judge-a-book-by-its-cover/ 

 

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Extracting an Adjustment - One Way to Measure

by Rachel Massey, SRA, AI-RRS

 

Excerpt:

Because I often get calls from both Realtors and homeowners asking how much a certain feature in a home is worth, I thought a brief discussion of one method of extracting an adjustment from the market might be worthwhile.

 

This method is described in detail in The Appraisal of Real Estate, 14th Edition (as Agrouped data analysis@ starting on page 398) and is not a new technique, but one that appraisers may find useful in their daily practice. It can work well because if the appraiser uses care in the isolation process, the sheer number of sales will provide a range of answers, which can then be used for extraction, and support of that particular adjustment.

 

My comment: this relatively short article has an excellent explanation of how to apply this technique. In my paid newsletter, I am focusing on how to support adjustments, starting with the many non-statistical techniques in April. Statistics is great but does not always work and can be difficult to learn and interpret. Of course, we all want regression software that will give us our adjustments, like CU has!!!

 

The March issue discussed printed education material. The April issue will cover webinars. The May and June issues will focus on resources for statistical techniques - printed material and regression software.

 

 http://www.workingre.com/extracting-adjustment-one-way-measure

 

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Report Says "False Equity is on the Rise" in Housing Market

 

Excerpt:

Home prices in some U.S. markets are rising much faster than rental incomes or what it would cost to build new houses in those markets, according to a new study by a real estate valuation firm.

 

The growing gap between sales prices, on one hand, and rents and so-called "replacement cost" on the other is evidence of  markets that are over-heating, said the report by Jacksonville, Fla.-based Smithfield & Wainwright.  "The build-up of false equity is on the rise again," the report states.

 

Using inflation-adjusted data, the firm concluded that recent sales prices of single-family homes in 13 states and the District of Columbia are 10% more on average than what the homes would have been appraised for using two other methods.

 

http://blogs.wsj.com/developments/2015/03/20/report-says-false-equity-is-on-the-rise-in-housing-market/ 


 

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Foreclosure to Home Free, as 5-Year Clock Expires 

Excerpt:

In September, Susan Rodolfi celebrated an unusual anniversary: five years of missed mortgage payments.

 

She is like a ghost of the housing market's painful past, one of thousands of Americans who have skipped years of mortgage payments and are still living in their homes.

 

Now a legal quirk could bring a surreal ending to her foreclosure case and many others around the country: They may get to keep their homes without ever having to pay another dime.


 

My comment: I have been hearing about this from appraisers who have neighbors that have not paid their mortgage payments for quite a while. It keeps the homes occupied when vacant, but what will happen when the banks take them back? More empty houses? Looks like maybe some will get a "free ride".


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In the April issue of the paid Appraisal Today - published April 1!!

- Fannie and State regulators want adjustment support!! 

   How to do adjustments - a review of 3 webinars                   

- Practical tips you can use today for getting more appraisals done and make more money     during this boom time. For appraisers, time is money.                        

- Fannie CU Hard Stops - be sure to check this on every appraisal!! If your appraisal has a hard     stop the loan cannot be submitted to Fannie. 


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Statistics and Appraisal Data

 

The key to any statistical analysis is DATA, DATA, DATA!!

Single family real estate data is not very reliable or consistent, and not enough is available in many areas, as we all know.

 

CU is the most significant attempt to get more useful data by requiring appraisers do use specific coding and criteria. However, real estate is local, local, local. Even the number of bedrooms varies a lot as there are different criteria for determining what is a bedroom, even in the same city. Three appraisers measuring the same house will probably not have the same square footage, as I learned doing relocation appraisals.

 

With CU, this is becoming more obvious as there are sometimes wide variations in how appraisers code factors. For example, why do condition ratings vary? How accurate is MLS? Is public records accurate? What is the best source?

 

Now that regression software is popular with appraisers for getting adjustments, I have been thinking about why it is often not very reliable. To understand even simple regression requires knowledge.

 

My first statistics class was in 1963. The first time I used multiple regression was in graduate business school in 1979, when I did a mini-thesis on factors in REIT stock volatility using SPSS.I used a remote university mainframe that kept blowing up and erasing my data. There were no data issues. Doing multiple regression analysis on real estate housing data was not possible. Way too much lack of usable data.

 

Since I started my newsletter in 1992, I have been writing about AVMs. The less data that is available, the less reliable the value.

 

As we all know, AVMs work well in a conforming home in a large tract of similar homes, built in the past 10 years. After that, the accuracy and reliability goes down fast. Just check what Zillow's Zestimate against your appraised value.

 

WHAT DO YOU THINK? POST YOUR COMMENTS AT WWW.APPRAISALTODAYBLOG.COM

 

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The Race to the $100 Million Spec House

 

Excerpt:

"These are people who are going to buy these homes to park money," says Jeff Hyland, of Beverly Hills-based Hilton & Hyland. One of his agents is working with a developer who is building a 90,000-square-foot spec home, and Mr. Hyland has another developing six 2-acre lots, each of which will feature a 40,000-square-foot spec home. When they are completed in about three years, the 40,000-square-foot homes will be priced around $100 million.

 

http://www.wsj.com/articles/the-race-to-the-100-million-spec-house-1426780130?mod=residential_real_estate 

 

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Ann O'Rourke, MAI, SRA, MBA

Appraiser and Publisher Appraisal Today
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