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Appraisals In a Declining Market

By
Real Estate Agent with The Charlotte Home Team/Keller Williams 56005

CHARLOTTE, NC:  Although I am a CHARLOTTE AREA APPRAISER, I work almost exclusively as an agent listing and selling homes in the CHARLOTTE REAL ESTATE MARKET.  Still, I do value the way an appraiser does value so  I usually don't have problems with the appraisals coming in low...until now.

    I listed a CHARLOTTE HOME FOR SALE earlier this year that was by far the nicest home in a declining neighborhood.  I was somewhat over what I wanted to list it for because the seller agreed to reduce the price after 2 weeks if we did not get any action.  The house had appraised last year for $170,000 and they wanted to list it there.  I was able to get them to see that in today's market it wouldn't go for $150k but we agreed to try it at $158,000...for 2 weeks.

The sellers found another home in MINT HILL  outside CHARLOTTE that they liked and we put in an offer contingent on the sale of their home. Imagine my surprize and their excitement when we received an offer for $152,000 within 10 days!  "Okay", I thought.  "Maybe I am losing my touch".

I met the appraiser at the property and he was very complimentary about all the great things the sellers had done. He commented on the extensive decking and beautiful tile in the kitchen, hardwood floors, big cul-de-sac lot.  It really was a beautiful home. 

The appraisal came in for $130,000!

So I called the guy and asked "What's up with that?" (in the nicest possible way, of course).  You never want to make enemies with the appraisers.

"All the homes that have sold in this  CHARLOTTE NEIGHBORHOOD in the last year were foreclosures or short sales", he said.  " I have to use them".

"But this house is head and shoulders better than anything else in the area". I replied.

"I know", he said.  "But unfortunately you are what your neighbors are.  I can't go out of the neigborhood if I have comps in there".

Needless to say the sale fell through and they decided to rent the house and hang on to it for a few years until we dig out way out of this economic mess.

The bottom line is:

Until we return to owner to owner transactions and all or most of the distress sales are absorbed by the  market, values are going to continue to decline.  It is important to note that there are many neighborhoods were there are owner to owner sales and these are the areas where we are already starting to see values rise.

Posted by

The Charlotte Home Team

Charlotte's Most Experienced, Educated & knowledgeable Realtors

working the Charlotte Real Estate Market today.

KC & Eileen Covington

 

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