(Washington, DC) August 1, 2019 – The Appraisal Standards Board (ASB), an independent board of The Appraisal Foundation, announced today that it intends to examine the concept of creating standards for evaluations, which are alternatives to appraisals used by financial institutions.
Currently, there are no uniform standards for appraisers to follow when conducting an evaluation, which leads to greater risk to the safety and soundness of the real estate transaction and diminished protection for consumers. The ASB intends to issue a concept paper around Labor Day, and will follow up with a public hearing with panels of constituents on October 18, 2019 in Washington, DC. As with all public meetings of the ASB, the public hearing will be broadcast via livestream.
IRVINE, Calif. – July 18, 2019 — ATTOM Data Solutions, curator of the nation’s premier property database and first property data provider of Data-as-a-Service (DaaS), today released its Q2 2019 U.S. Home Sales Report, which shows that U.S. single family homes and condos sold for a median price of $266,000 in the second quarter, up 10.8 percent from the previous quarter and up 6.4 percent from a year ago — reaching a new median home price peak.
Meanwhile, the report also shows that homeowners who sold in the second quarter had owned an average of 8.09 years, reaching a new peak, up 3 percent from last quarter and up 4 percent from Q2 2018. Homeownership tenure averaged 4.21 years nationwide between Q1 2000 and Q3 2007, prior to the Great Recession.
CHICAGO, July 18, 2019 /PRNewswire/ — The nation’s largest professional association of real estate appraisers vigorously condemned today’s action by the National Credit Union Administration, calling the NCUA’s decision to effectively reduce the number of appraisals required for commercial real estate loans irresponsible, radical and dangerous.
“This is an outlandish scenario for anyone who cares about the safety and soundness of the nation’s commercial real estate lending system, and it could recreate conditions that led to the financial crisis of the late 2000s,” said Appraisal Institute President Stephen S. Wagner, MAI, SRA, AI-GRS. “The NCUA’s ill-conceived, damaging decision shows overwhelmingly the need for immediate, rigorous congressional oversight.”
The NCUA Board of Directors today quadrupled – from $250,000 to $1 million – the appraisal threshold for nonresidential real estate loans. The appraisal threshold is the loan amount below which appraisals are not required. Increasing the threshold would drastically increase the number of nonresidential real estate loans that would not require an appraisal.
“This decision – based entirely on providing regulatory relief – completely ignores the fact that the United States suffered through a financial crisis less than a decade ago,” Wagner said. “If anything, current market conditions beg for heightened due diligence by regulated institutions — not a loosening of a fundamental risk management activity.”
The federal banking regulatory agencies – the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, and the Federal Reserve Board – last year approved increasing the commercial appraisal threshold from $250,000 to $500,000. The NCUA’s decision could create a regulatory arms race between the agencies and the NCUA.
The NCUA – the agency with the least direct experience in overseeing business and commercial real estate lending – effectively could be driving the appraisal policies for the entire financial regulatory system. The bank regulatory agencies – despite already determining otherwise – will face pressure to establish a corresponding threshold level to the NCUA’s level.
Additionally, federal legislation signed into law last December links commercial appraisal threshold levels for two of the Small Business Administration’s most popular loan programs to those established by the federal banking regulatory agencies.
“The potential domino effect is chilling,” Wagner said. “Everyone involved in this country’s commercial real estate industry should be incensed at the NCUA’s reckless decision, which potentially places the nation’s economy at significant risk.”
The NCUA’s action would significantly increase the number of credit union loans not requiring an appraisal – with the proportion exempted rising from 27% to 66%. Last year credit unions made $67 billion in commercial loans in this country.
“It’s clear that the solution is not only increased congressional oversight, but also improvements to the appraisal regulatory structure,” Wagner said. “The Appraisal Institute is working with members of Congress and their staffs to bring about meaningful change that will help prevent this type of outrageously heedless public policy making in the future.”
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Statement: Raising Commercial Appraisal Threshold Puts U.S. Economy at Greater Risk
(WASHINGTON) July 19, 2019 – The Appraisal Foundation President David Bunton today raised concerns about the action taken by the National Credit Union Administration, which quadrupled the threshold for commercial transactions requiring an appraisal from $250,000 to $1,000,000.
“The Appraisal Foundation is deeply concerned that the action taken yesterday by the National Credit Union Administration is yet another needless attempt to dilute the federal financial and public policy protections of Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, which requires real estate appraisals to be used in federally related transactions.
Yesterday’s action and the proposed rule by federal banking regulators to raise the threshold amount for residential real estate, combined with the years of accumulated carve outs, waivers, and exemptions, has jeopardized the U.S. economy by putting it at greater risk.?
The protections originally envisioned by Title XI are facing a death by a thousand cuts, and unfortunately, the 1000th may be too close for comfort.
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Total Dollar Volume of Homes Flipped With Financing Reaches 6.4 Billion – A 12-Year High
Average Flipping ROI Continues to Decline to An Almost Eight-Year Low
While Gross Flipping Profits Drop 12 Percent From Last Year
IRVINE, Calif. – June 6, 2019 — ATTOM Data Solutions, curator of the nation’s premier property database and first property data provider of Data-as-a-Service (DaaS), today released its Q1 2019 U.S. Home Flipping Report, which shows that 49,059 U.S. single family homes and condos were flipped in the first quarter of 2019, down 2 percent from the previous quarter and down 8 percent from a year ago to a three-year low.
The 49,059 homes flipped in the first quarter represented 7.2 percent of all home sales during the quarter, up from 5.9 percent in the previous quarter and up from 6.7 percent a year ago — the highest home flipping rate since Q1 2010.
Homes flipped in Q1 2019 sold at an average gross profit of $60,000, down from an average gross flipping profit of $62,000 in the previous quarter and down from $68,000 in Q1 2018 to the lowest average gross flipping profit since Q1 2016.
Following his appearance yesterday before the House Subcommittee on Housing, Community Development and Insurance to advocate passage of HR 2852, which would allow licensed appraisers to perform appraisals for Federal Housing Administration (FHA) loans, Appraisal Institute President Stephen S. Wagner is expressing optimism that the legislation will find its way through a Congress which seems to become increasingly divided along party lines.
“We have positive thoughts on that,” said Wagner in an interview with National Mortgage Professional. “I don’t see where there’s much criticism with this, as it seems to be reasonably well accepted. We’ve not heard any resistance to it.”
The Zonda / Metrostudy teams recently gazed into their crystal balls to provide financial analysis for the homebuilding industry, which includes bad news for the end of year 2021. “We’re predicting a fairly healthy year for the remainder of 2019 with about 2.575 million jobs being created this year,” said chief economist Mark Boud of Metrostudy. “This forecast was done before the recent news on tariffs so this may be revised downward. As time goes on we do predict a recession and predict job losses to begin at the latter part of 2021 and going into 2022.”
The good news is Boud and his team don’t believe the recession will be nearly as bad as what happened during the housing crises. The timing of the recession prediction is based on the 2-10 treasury yield spread, a key economic metric that measures the difference of yields on short term (2-year) treasury bonds versus long term (10-year) treasury bonds. When the short term bonds are worth more than the long terms the yield curve is “inverted” and a recession typically follows about 18 months later.
The current 2-10 yield spread has been dropping since 2014 and was very close to inversion the last time it was measured which was in the fourth quarter of 2018. “We expect it to go inverted sometime this year and that corresponds with a recession in the later part of 2021,” said Boud.
“Voice of Appraisal” is a show designed to deliver the most up to date news and information for the working real estate valuation professional. The show provides top analysis of real estate trends and issues that affect appraisers nationwide. Our no-nonsense approach to appraisal, real estate, banking and politics creates a cutting edge program that provides an insight into the appraisal profession that is seldom heard.
The past 25 years of appraisal organizations, affiliations, and designations have left our industry splintered and broken. We have become a group too caught up in our own egos and titles to see how our profession is now crumbling before us.
We have divided ourselves, and our house will not stand!
We don’t need any more regulations to hinder us, or unions to protect us, or dwindling organizations to speak for us, or financial institutions to threaten us.
What we need is a voice, a movement, to take back our industry, and control our own destiny.
This show exists to offer such a voice to this lone wolf profession, that real estate appraisal has now become. Welcome to the movement!
When the Republican Party first put forth its plan to reform the country’s tax laws, housing experts worried it could put a damper on home-buying activity. Now that the GOP’s tax plan is the law of the land, some fear those predictions may be coming to fruition.
A new report from analysts at the Federal Reserve Bank of New York examined the drop in home-sales activity between the fourth quarter of 2017 and the third quarter of 2018. The figures in the respective quarters were adjusted for any seasonal factors impacting the housing market at those times of year. In that period, new home sales fell 7.6% nationwide — with the Northeast and West regions sustaining the most substantial drops in sales activity.
New Federal Reserve Bank of New York findings suggest that the recent changes to the federal tax code have contributed to the slowdown in home sales that occurred throughout much of last year.
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