So-Called Economist Slams Appraisers
Is the cost-benefit of conservative appraisers worth it?
Mr. Adam Ozimek, who is described as a ‘senior economist’ at Moody’s Analytics (from a search I did) penned this gawd-awful piece: Appraisers May Be Holding Back the Housing Market, And That Might Be Okay. This piece appeared in Forbes.com on July 5 – the focus of which is to nearly blame ‘conservative’ appraisers for “holding back the market,” … but maybe it’s OK, he says. Where do they find these people, anyway?
I love it when so-called authority figures start off with speculations, not backed with any facts, and fill the space with conjectures, as Mr. Ozimek does in the article:
…this is a highly speculative post in multiple directions at once.
There isn’t a lot of data to back up either claim, and I wouldn’t elevate other above conjecture at this point.
Here is my first conjecture: appraisers are very conservative in the wake of the housing bubble, and are effectively keeping prices below their market levels.
The way to ensure the deal is for the appraisers to assess slightly higher than (or equal to) contract prices. Much anecdotal evidence suggests that such bias exists.
Then the blog piece almost concludes with this brilliant statement:
“Micro macroprudential policy in general seems under-discussed.”
Do any of you know what Mr. Ozimek means?
What I get out of this blog piece is we ‘conservative appraisers’ just need to rubber-stamp values in appraisals to the agreed purchase price of the homes being bought. But maybe not. We’d be best to employ some micro macroprudential policy process to figure it all out. (Help! Mr. George Dell… can you decipher this???!)
You can access the blog from this link, and it looks like it allows for comments from readers to be added, which I hope some of you will do.
Excerpt from the article:
So what gives? If housing demand is strong enough to quickly absorb supply, why aren’t prices rising faster and luring more sellers and new construction into the market? Why is supply low and price growth slow? Here is my first conjecture: appraisers are very conservative in the wake of the housing bubble, and are effectively keeping prices below their market levels.