From the Boston Herald:
Price is (not) right: Appraisals now sink sales
Desperate homeowners trying to unload properties face a new obstacle: appraisers who are increasingly coming in with lower-than-expected estimates of home values.
The low estimates are leading to last-minute nixing of some sale deals and putting even more downward pressure on home prices in a tight housing market.
Home appraisers, whose estimates are key to the issuance of mortgages, say market forces are ultimately the cause of falling home values.
But they acknowledge that loan underwriters, who only a few years ago seemed more than glad to back ever-higher home valuations for mortgages, are now more cautious about depreciating home prices. The bottom line: underwriters don’t want to get stuck holding loans for homes whose values will only tumble downward days after a mortgage is signed.
Home appraisers are also nervous about getting swept up in law-enforcement investigations of appraisers’ roles in pumping up valuations at the behest of some lenders. Yesterday, New York Attorney General Andrew Cuomo said he had found a “pattern of collusion” on mortgage appraisals linked to Washington Mutual Inc., the nation’s largest savings and loan company.
“Everybody’s pulling back – perhaps a little more than they should,” said Shaun Fitzgerald, an independent Easton appraiser and president of the Massachusetts Board of Real Estate Appraisers.
Richard Goulet, owner of the Appraisers Group in Belmont, said he’s seeing home-sale deals killed at the last moment because appraisals come in lower than anticipated.
Buyers and sellers might agree to a home price – but that doesn’t mean the buyer will get a mortgage at that price, real estate officials say.
I’m amazed at the breadth of this complete meltdown…..I’ve have noticed a tremendous amount of renovations occurring on existing homes. Perhaps people are simply convinced that sitting tight and working with what you have is the best answer. For now.
Tight credit ,20% dp needed,appraisers going low to cover their a##,inventory 13 months supply and this is just the start.We still have not seen the across the board price declines that we forcast.This will surely be better or worse than predicted depending on your camp.30 to 50% for sure.Timeline uncertain ,these things tend to gain momentum ,so maybe sooner than even bearish bears here forcast for the massive declines.Once it gets going it will happen faster than anyone thinks.
class action lawyers will do a job on appraisors. ripe with manipulation and fraud past 3-5 years.
#1 Essex: Agreed. Also some people shocking as it might seem might have no clue that any thing is wrong,and are spending money on the house because it will make the house worth more.
You do not know how many times over the last few years I have heard oh the kitchen remodel is 50/100k, but it will add 150/200k more in value to the house.
Some of these people renovationg may be doing it now with the intention of selling in the Spring who knows.
But American in general ar an ill informed lot, on most topics.