Bubble or bust? The nation’s home prices continue to climb, with some cities posting double-digit annual growth rates during 2012–13. While the continued economic recovery seems to trend in a positive direction, consumers, appraisers and other market participants should be on high alert for red flags that could signal the possibility of another housing bubble in the near future. How can appraisers tell if the current housing market is “bubble” or “bust”? Here is some guidance from the Appraisal Institute’s “Guide Note 12: Analyzing Market Trends.” Appraisers should be able to spot the symptoms of a changing market. Appraisers and...
One hundred eighty days flew by in an instant. When the AMC Administrative Rules were launched on March 4, 2013 we were in the infancy of AMC registration. Here we are, six months later and we’re nearing 140 registrants. That’s more than 20 per month. I expect by year’s end we’ll have 180 registrants or more. This is an important newsletter issue to keep. There are a lot of burning questions that need to be answered in one place so that everyone understands what is expected. What Happens Next? August 30, 2013 is the last day in which existing AMCs...
Late yesterday afternoon a bill was introduced in the House of Representatives that would alter the mortgage process and ultimately the way millions of Americans receive a mortgage. HR 1108 would eliminate the need for an appraiser to appraise a home prior to the funds being disbursed to the
“Hiring of Trainees to Remain Slow” This is ‘Shocking News?’ According to a recent survey conducted by the Appraisal Institute, “trainee hiring will remain relatively weak for the next one- to two-years.” Um, I hate to disagree with the results of what I am sure is a credible survey, but this is just a gross underestimation. One-to two-years? How about FOREVER unless something drastically changes in our industry? Most know me as a fairly optimistic voice in the appraisal world. I am not usually one of those on the sidelines calling “foul” at every supposed indiscretion and ‘unfair’ practice that...
The Appraisal Institute Urges ASB to Make Uniform Standards of Professional Appraisal Practice More Flexible The Appraisal Institute announced Aug. 16 that it has asked the Appraisal Standards Board to institute a principles-based approach to appraisal standards that would, over time, require fewer changes to the Uniform Standards of Professional Appraisal Practice and enhance understanding of the document. Representatives of AI attended a public ASB meeting in July, during which Paula Konikoff, JD, MAI, chair of AI’s Appraisal Standards and Guidance Committee, urged the ASB to: Modify USPAP to be “principles-based” and not “rules-based,” as it has become over time;...
NJ Governor Vetoes BPO Legislation, Cites Consumer Confusion On Aug. 19, New Jersey Gov. Chris Christie vetoed bill S. 2551, legislation that would have significantly expanded the ability of the state’s real estate professionals to provide broker price opinion and comparative market analysis services. In his veto message to the Legislature, Christie said, “While I appreciate the desire to facilitate additional business for real estate licensees in the state of New Jersey, I am concerned about potential consumer confusion.” The Appraisal Institute chapters in New Jersey testified in strong opposition to this bill when it was going through the legislative...
Appraiser Trainees Hiring to Remain Weak: AI Survey Hiring of real estate appraiser trainees will remain weak for the next one to two years, according to an Appraisal Institute survey released July 17. About one-fifth (21 percent) of commercial appraisers said they would add full-time trainees; fewer than one-tenth (9 percent) of residential appraisers said they would do so, according to the survey of U.S. real estate valuation professionals conducted in May and June. Commercial appraisers account for less than one-third of practicing U.S. appraisers. According to the survey, 93 percent of the residential appraisers who employ trainees employ one...
Appraiser Confidentiality: Loose Lips, Big Claims, USPAP Absurdity, and Subpoenas Allegedly “Loose Lips” Cause a Big Claim. A recent and relatively big appraiser liability claim involved a commercial appraiser’s alleged breach of confidentiality. The damages paid to the plaintiff were significant. According to the plaintiff’s complaint (my recounting of the facts here is simplified), a lender had engaged the appraiser to perform an appraisal for a construction loan to the developer of a shopping center. Some of the information received by the appraiser included lease commitments from prospective tenants. The anchor tenant was a well-known retailer. The appraiser completed the assignment, but...
My Main USPAP Issue – Statement Letter to the ASB The purpose of USPAP is to promote and maintain a high level of public trust in establishing requirements for appraisals and “reliable” valuations. The problems is, however, that it is subjective. Assuming one can support the conclusion or opinion; beauty is in the eye of the beholder, or in this case, the appraiser. Likewise, evaluation and selection is in the eye of the appraiser – which is why two different and reasonable and competent appraisers can reach two different, but equally credible opinions, on the same property. And that is...
AMC Licensure in Virginia On July 1, 2014, every AMC wishing to continue operating in Virginia will be required to apply to the Virginia Real Estate Appraiser Board for a license to conform with recently passed AMC laws. Hopefully, the VREAB will prudently and completely vet these business PRIOR to the issuance of a license. It is my understanding the VREAB staff is leaning towards granting licensure upon application without any substantive vetting of the applying AMC’s. It is also my understanding that appraiser members of the VREAB are opposed to this administrative position and understand the importance of pre-licensing...
