Yes, it is 2005

Eesh, I've been there.  California is declining like you wouldn't believe.  Hang in there!

Joe, Same thing here in Florida.  It's great for the buyers (these 2005 prices) but not so good for sellers who bought in 2006.

The economic adviser I listen to (my dad) thinks rates are going back to 1985 - and we are headed to 13%!  We are fortunate to be in an appreciating area.  I thank the Lord each day.  The house 2 doors down from me sold last week in 3 days - 25K above the tax value (we were assessed last August). I figure that's pretty good.  Ya'll are welcome in NC!

Unfortunately the Underwriting standards are not the same as back in 2005!

Sean Allen

Unfortunately the Underwriting standards are not the same as back in 2005!

There were underwriting standards in 2005???

 

Seriously, Joe, to answer your question, maybe we can't admit someone did a good job if they did not.  Normally, I'm not inclined to think so ill of my colleagues, but I've had a couple of eye-opening experiences the past week.  Here's the scenario:

Purchase for a home on a small, private, non-recreation lake.  $440k contract

1st Appraisal:  Well documented with 9 Sales comps and 3 Listing comps.  Well supported adjustments and a full page of addenda explaining market conditions, time adjustments, rate of decline and methodology for determining decline.  Final appraised value:  $395K

2nd Appraisal: 6 Sales comps.  No Listing comps.  February 08 sale of similar sized and aged home in the same subdivision not included.  Wrong flood data, wrong zoning, no time adjustments on any 2008 sales (market had accelerated decline in the past quarter), wrong distance on one comp (reported as .27 mile from subject when it's actually 1.25 miles away), very little narrative with no explanation of market conditions.  Appraised value: $422k

3rd Appraisal: 3 Sales Comps.  No Listing comps.  All three Sales comps taken from a far superior ski lake with no adjustments. No narrative whatsoever --- just checked boxes and one word descriptions.  No time adjustments.  Appraised value: $457k (same house sold at the height of the 2005 market for $449k).  Other houses in the subdivision (non-lakefront) have declined 15%+ over the past 18 months.

Mortgage Broker laughed the 3rd appraisal right off his desk.  The 2nd appraisal will be submitted.  But without contrasting reference, will the underwriter catch all the mistakes?

My contention is that as reforms are being considered, legislation should be passed that any and all appraisals prepared for a federally regulated transaction must be submitted to the lender as part of the file.  Otherwise, cherry-picking for the best number will continue.

 

Sorry, Joe.  That's a little beyond what you asked for, but.....

 

I'm just sayin'........

Seems like the prices are about what they were back then, will they come back? I think it may be a little while.