Housing Bubble, FTC & Antitrust Immunity

Housing Bubble, FTC vs LREAB Update & Antitrust Immunity BillIs the Housing Bubble About to Burst?

Subpoenas Have Been Issued; A Stay Has Been Granted; The Case is Moving Forward

The FTC vs LREAB case has had numerous articles floating around.  Some information that is being stated is inaccurate, some embellished, some truthful. The official case log contains everything from the initial complaint to the Judge’s rulings. Take a look at some of the subpoenas issued and who is filing motions to quash them…. What do these AMC’s have to hide? Click here for the official case log.

Wow, Just Wow!

Senators Mike Lee, Ted Cruz and Ben Sasse have co-sponsored Senate Bill 1649 introduced on July 27th.

“S.1649 – A bill to help States combat abuse of occupational licensing laws by economic incumbents, to promote competition, to encourage innovation, to protect consumers, and to facilitate the restoration of antitrust immunity to State occupational boards, and for other purposes.”

The full text of the bill is unavailable at this time. This has to be a direct result of the FTC’s claims against the North Carolina Dental Board and LREAB currently underway.

Is the Housing Bubble About to Burst?

Four major cities are sounding the housing bubble alarm. Denver, Houston Miami, and the Washington DC area have reached an “overvalued status” and can no longer maintain sustainability according to CNBC.  Appraisers understand real estate values. We understand they are local and fluctuate. Rising sales prices in many markets are the results of low inventory and affordability was kept in check due to low interest rates. Now that interest rates have begun to rise, and more Fed scheduled increases on the way, housing is becoming unaffordable in some areas. See the article here.

VaCAP ADVICE: Don’t assume anything! Check each market and the submarket for trends. Pay attention more closely to markets where affordability is impacted the most. Create graphs with your data to help recognize trends and not just a seasonal fluctuation. Check the market and submarket different ways for consistency in trends. Look at micro and macro data. Include the graphs within your report to help demonstrate your findings to the client. If you are not sure of your results, reach out to colleagues and discuss what you are seeing. Report credible results from your research and analysis.

Music to Our Ears! Or is it?

Wells Fargo has been in the news a lot lately; and we do mean a lot. They are getting exposed for wrong doing every time we turn around. Some good news for appraisers though, they are no longer using AMC’s. Great News, we know, but there is a downside. Appraisersblogs has published an article on why appraisers may not want to sign up with Wells Fargo. Every appraiser needs to read this and seriously make an informed decisionSee the article here.

Related: VaCAP received information that Flagstar Bank is eliminating the use of AMCs. This has not been confirmed by VaCAP. Click here for more info. We believe this will be an ongoing trend as many lenders realize they are responsible for the actions of the AMC they use. We will share more once we confirm the facts.

VaCAP Board
VaCAP Board

VaCAP Board

Coalition of individual appraisers working together to unite, promote and protect the collective interests of all appraisal professionals in Virginia; to promote needed changes in laws, rules, regulations, policies and standards affecting all appraisers in Virginia; to observe and report the actions of regulatory, legislative, oversight, and standards-setting entities of the Commonwealth.

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6 Responses

  1. Avatar jeanie says:

    Here is the link to the bill S.1649

  2. Baggins Baggins says:

    For the first time in probably 3 years I just checked the stable box in a county just North of Denver.  Average monthly appreciation has been substantial but most people at least 3 years in gained sudden 100k equity, in some cases 200k or more.  Someone is now driving a lambo in Thornton, remarkable and completely foolish, out of place.  Newsflash, pot is more expensive when regulated by the government, much much more expensive.  I’m struggling to see the sustainability here but we have new news of an 80 acre amazon warehouse sprouting up just a few miles north.  I’m buying a paintball gun and if I see a drone delivery dealie over my land, I’m shooting it down.  Pretty funny to see the flatlanders spinning tires and wondering how to get mag chloride off of chrome rims and custom boost systems which go out of balance due to both weather and altitude.  lol.  “You came, you got high, now go home.”  Behind the scenes our markets had notable turnover to investors in 2008 range.  They bought, they held, they worked with major marketing firms to boost the appeal factor, they cashed out.  End of story, it will happen in your location next.  Think it’s coincidental when investors are done unloading inventory and new construction approval slows that rates suddenly go up? Might be but it’s one hell of a coincidence when it happens over and over again.

  3. Mike Ford Mike Ford says:

    Where to begin?

    OK. “To determine if a market is overvalued, CoreLogic compares current prices to their long-run, sustainable levels, which are supported by local economic fundamentals like disposable income. An overvalued market is one in which home prices are at least 10 percent higher than that level. The rest of the top 10 markets are considered “at value,” but none are undervalued, as prices are higher in all of them compared with a year ago.” 

    So, according to Coreillogical if a market has a 10% appreciation rate over it’s undefined ‘long term’, arbitrarily decided sustainability level it is over valued?  …and the clapping seals in the grab-any-sound-bite media without asking questions repeat the Chicken Little rumor. IF they keep it up long enough, eventually it may even turn out to be correct. Based on that false metric California should once again have been over valued statewide as well.

    When will the media and those who are responsible for disseminating accurate economic information recognize that just being a big data aggregate like CL does NOT give them any credible credentials as analysts? They collect LOTS of data, but so far I’ve yet to see them arrive at an accurate conclusion about what that data actually means.

    They DO like to act like they should be listened to though! How can any company with access to so much information continually get it so wrong?

    I cant wait to read CL’s excuses when those markets have still not collapsed six months from now (barring large bumps in interest rates in short time frames).

    I’m guessing their corporate policy manual includes copies of the Story of Chicken Little and The Emperors New Clothes…as models to be emulated!

    • Baggins Baggins says:

      Very interesting insight into the process Mike. I had presumed the ‘overvaluation’ or overpriced position was based on the relationship from median family against monthly payments against median home values, or something like that. And soon to come, this new qualification relief where borrowers can tap their prequalification at 50% instead of just 40% or whatever those numbers are and will be. But the truth for regular everday 9-5 workers whom consume mortgage products is that rising energy costs coupled with basic inflation for all costs of services and goods quickly chomps up available free spending margins. Our personal path to success was to keep our buy at 80% max of our prequal level. I can’t imagine buying at the peak, we’d have absolutely no spending cash. The thing about big companies, is that regular consumers are advised to examine the details of their own budgets and affordability factors first and foremost. All this aggregate data is just background noise in the end, when you’re counting monthly dollars left in your pocket.


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Housing Bubble, FTC & Antitrust Immunity

by VaCAP Board time to read: 2 min