This is the "NORMAL" Housing Market

By
Real Estate Agent with Mezzina Real Estate & Insurance

Yeah, that's right. This is the "NORMAL" Housing Market that you have been waiting on to return. I know this because the appraisal says it. Well, OK. Maybe it doesn't say that exactly but if you read the report you would think it is a pretty good market to sell a house. I remember talking to the appraiser before he went out to the townhouse and I asked how I could help with comps and what our current market was like. He seemed so nice on the telephone.

Yes, he says prices are still declining. But, the inventory is stable (?) and the number of distressed sales are not significant for my area (Really?). Who am I to argue with an expert. I mean after all he does have all the data from the Monmouth County MLS to back up his numbers. And, he found two recent (within a year) of similar homes that sold at a Fair Market Value (FMV). One sold for the new benchmark and the other for $5000 more.

And, yeah. I know you can't use other distressed properties in an appraisal. That's why when he couldn't find any other comparables in that housing community he had to look 2 miles down the street and use a single family detached home to help his averages for the home in the multi-family community (aka - attached dwelling). I fully understand. Why would anyone expect the appraiser to use other townhouses in another multi-family community of attached dwellings that lies a mile away? 

What? You say Ocean County has its own MLS and that not all listing and sales in my area get posted in the Monmouth County MLS. Well, still, the apprasier must have enough data in that MLS to come up with his number. Heck, he even gave a discount of $7000 on my listing for necessary repairs of paint and some carpet (not all the carpet) because he did his due diligence and called the other agents to find out that those houses were in pristine condition.

Still, I got the $7000 off the FMV. And, using Federal Housing Administration (FHA) rules we can bring that amount down to a lower net. Wait! No, I didn't. The FMV is the same as that unit that sold as a private sale and was in pristine condition. And, didn't the private sale net less than the amount the property for what it was sold? Sure. That's right. If a person sells a house for $100,000 they don't walk away with $100,000. Their "net" is less commission and other expenses like the real estate transfer tax and attorney bill.

So, that's NORMAL, right? I'm sure I can explain that to a person sitting 2500 miles away in an office and that has never been to this state. The bank executive will just pull out a pen and make some adjustments to the number the appraiser gave to them. They wouldn't tell me that they are just following FHA rules on a short sale would he? Besides, the Monmouth MLS doesn't have this property listed so "it's not listed" and the owner is only allowed the higher percentage number to come up with the "net" figure the bank "must get" for the sale of the property.

Stop your belly aching. This is NORMAL in real estate. In the Army they just call it a Snafu.

Gesundheit!

Comments (24)

Linda Jamail Marshall
Linda Marshall,Houston Texas, Linda Marshall, Realtors® - Houston, TX
Broker, ABR,QSC,RECS,ACRE - Innerloop Houston, Tex

great post!!!!!

 

Jun 17, 2011 10:49 AM
Jim Paulson
Progressive Realty (Boise Idaho) www.Progressive-Realty.info - Boise, ID
Owner,Broker

My definition of "Normal" is "the average of the extremes".  Real estate will always go through cycles so yep, it is normal to be extreme!  Here in Boise, the market is actually getting overheated in some price points with many multiple bid offers on low to moderate priced homes.

Jun 17, 2011 12:31 PM
Lyn Sims
Schaumburg, IL
Real Estate Broker Retired

I'm not getting it, maybe it's not funny?

Jun 17, 2011 12:56 PM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

It is the new top down management style that is ruining business and our government.  Thanks for the post.

Jun 17, 2011 05:31 PM
Gregory Bain
Mezzina Real Estate & Insurance - Little Egg Harbor, NJ
For Homes on the Jersey Shore

John, thanks for stopping by and commenting.

Jun 18, 2011 01:16 AM
Gregory Bain
Mezzina Real Estate & Insurance - Little Egg Harbor, NJ
For Homes on the Jersey Shore

Mike, I forgot about that Army acronym.

 

Jun 18, 2011 01:17 AM
Gregory Bain
Mezzina Real Estate & Insurance - Little Egg Harbor, NJ
For Homes on the Jersey Shore

Hi, Barb. I miss the old gang and format of ReLib, too.

Jun 18, 2011 01:18 AM
Gregory Bain
Mezzina Real Estate & Insurance - Little Egg Harbor, NJ
For Homes on the Jersey Shore

Abby Normal. Ha. I thought you were my old friend Vance. He had a dog named Abby and used Abby Normal often. Thanks for stopping by.

Jun 18, 2011 01:19 AM
Gregory Bain
Mezzina Real Estate & Insurance - Little Egg Harbor, NJ
For Homes on the Jersey Shore

Linda, Thanks.

Jun 18, 2011 01:20 AM
Gregory Bain
Mezzina Real Estate & Insurance - Little Egg Harbor, NJ
For Homes on the Jersey Shore

Jim, I can point to a lot of good indicators here in LEHT, NJ. Construction started on a commerical property, a re-newed start up to a multi-family project of townhouses, a clearing of a large tract for another multi-family (townhouses) and the setting of a new waterfront modual home to name a few.

then again, I could go out and show you the struggle of many empty commerical rentals for stores and offices, a dead mall, and the remaining business signs of defunct real estate offices. 

It's all how you want to read it.

thanks for commenting.

Jun 18, 2011 01:25 AM
Gregory Bain
Mezzina Real Estate & Insurance - Little Egg Harbor, NJ
For Homes on the Jersey Shore

Lyn. Maybe. You may be right. Thanks for commenting.

Jun 18, 2011 01:26 AM
Gregory Bain
Mezzina Real Estate & Insurance - Little Egg Harbor, NJ
For Homes on the Jersey Shore

Gene, I agree. The bank never should have assigned the job to an appraiser that does have access to the local MLS.

Jun 18, 2011 01:31 AM
Anonymous
Susan Kent

The lender probably didn't assign the job, they more than likely ordered the appraisal from an AMC.  There are good and bad AMC's out there, but the majority don't seem to care about thing like competency or accuracy, they want the cheapest and fastest appraisal.  The bank pays the AMC, so the AMC wants the cheapest appraiser they can get since they get to pocket the difference.  Dodd-Frank has created a nightmare!  

 

Jun 18, 2011 02:48 PM
#17
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

This may not be what we have considered to be a "normal" market in the past but it is what it is. Get used to it because this is the shape of the market for the foreseeable future.

Jun 18, 2011 06:35 PM
Anonymous
Mark Cohen, Realtor-Broker, Eyemark Realty, Gainesville, Florida

Hi Greg,  Hope all is well.  There are different standards today.  What was weird a few years ago is now normal.  Just like laws and customs change, appraisal rules change.  Appraisals used to be approximations of value, now they are wild guesses.

Jun 19, 2011 07:44 AM
#19
Elva Branson-Lee
Solid Source Realty GA - Atlanta, GA
CDPE - Atlanta Real Estate & Short Sale Agent

I feel your frustration, Greg. Since I've been in the business for just the past three years, this really is the normal market for me -- that is, it's all I've even known.

Jun 20, 2011 04:35 AM
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

With all of my acquired prospecting and conseling skills , I could always be a Walmart Greeter ! *L*

Jun 22, 2011 11:21 AM
Gerard Gilbers
Higher Authority Markeing - Asheboro, NC
Your Marketing Master

That's the way we've done it for the last 50 years, so it has to be right!!! (Standard govenment thinking!!)

Jun 23, 2011 04:49 PM
Not a real person
San Diego, CA

We might be seeing a new normal for the economy and unemployment, too. It's a new world order.

Happy Monday!

Sep 25, 2011 11:33 PM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hi Greg -- reading your post was like a blast from the past and while appraisals continue to be challenging the process(in my opinion) has changed dramatically in the last year.   

Jul 23, 2012 12:53 AM