Does anybody realize what the new HVCC rules are going to do the real estate market?  If the appraisers are so tight with the appraisals and values how will home values ever go up?

I had a young first time homebuyer that was buying a Livonia condo.  She had put an offer of $122,000 in but the bank came back and said it was only worth $118,000.    So my Livonia condo buyer had to come to the table with $4000 more because the sellers couldn't sell it for less.  They owed that much on it.

Banks are now and appraisers are now determining market value.  My client thought it was a fair price.  It wasn't outrageously high.  Or extremely unreasonable.  But there was no Livonia condo that sold for that price in the last six monthes.  There were two other offers that were full priced offers on the condo.  So we weren't bidding crazy.  We only go it because we had 20% down and the others were FHA offers.

Isn't that the way it is when real estate values go up? A home will sell for more than a neighbors when the demand is high.  That's the way the real estate market works.  Supply and demand determines price.   

But that isn't the way it is going now.  I wonder how long it will take Washington DC to realize they really screwed up.  They have basically put a cap on real estate values in the US. 

Leave it to Washington politicians to screw everything up.  Home values can now go down but how will they ever go up if banks and appraisers only value the house on past sales.  Doesn't what a buyer will pay really determine market value? 

It is going to be real interesting and quite a while before everybody realizes what they have done.  

CONGRATULATIONS WASHINGTON POLITICIANS ON PUTTING ANOTHER RESTRAINT ON THE REAL ESTATE MARKET.  SO MUCH ON THE HOUSING RECOVERY. 

       One step forward two steps back. 

Russ Ravary your Metro Detroit real estate agent