Appraiser

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stepping_up_IHB

stepping_up_IHB

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So, I've got an appraiser coming out tomorrow morning so that we can get this refi done. He didn't seem like the sharpest tool in the shed, but has been at this for 18 years. Thought I'd share a few interesting things he said.



1). I brought up a comp in the area that came on the market for SIGNFICANTLY less than anything else and went contingent the next day. He says he sees this a lot where the REO listing agent convinces the bank/asset manager that the property will only fetch $50K-$100K less than it might actually get and the agent has a friend or family member lined up to snag it. It goes on the MLS for one day to show the asset manager that they are doing their job. Is this really happening?



BTW, Freedom it was the Yorkshire comp we were discussing and he says that because it seems so fishy that it won't count in our appraisal????



2). He says that San Diego has leveled and that we are right around the corner. Not sure if SD has leveled, but he said that they started declining first, which I agree with. We actually were looking at north SD county in '07.



Again, I took everything he said with a grain of salt because he just didn't impress me as someone who was very sharp, but thought I'd share what an appraiser is saying these days and open it up for comment.
 
1. is he just using solds? that is good, because 653 surf is in escrow at 358, and 590 and 594 bay are offered at 340, 316, as is 603 knowell (330).



2. So are we in the OC leveling? No. We did stabilize by CS, with just the mix of housing going cheaper for a lower median, for much of the year. But my December numbers will not be happy ones, and the next three months could be quite dramatic for CS retreats.



3. Has SD leveled? maybe the low end (which is in the 200ks there). But the high end is absolutely not moving in SD. 4 yrs inventory above 1M.





Good luck on the appraisal, though. get it done ASAP.
 
[quote author="asianinvasian" date=1231930054]<a href="http://en.wikipedia.org/wiki/English_grammar">http://en.wikipedia.org/wiki/English_grammar</a></blockquote>


And what exactly is your point AI?
 
[quote author="freedomCM" date=1231929959]1. is he just using solds? that is good, because 653 surf is in escrow at 358, and 590 and 594 bay are offered at 340, 316, as is 603 knowell (330).



2. So are we in the OC leveling? No. We did stabilize by CS, with just the mix of housing going cheaper for a lower median, for much of the year. But my December numbers will not be happy ones, and the next three months could be quite dramatic for CS retreats.



3. Has SD leveled? maybe the low end (which is in the 200ks there). But the high end is absolutely not moving in SD. 4 yrs inventory above 1M.





Good luck on the appraisal, though. get it done ASAP.</blockquote>


Of course they only use closed sales.... list prices are all over the map and short sales are meaningless. I've been trying to get them out here for a month because of 653 surf. I can't believe how long it took to get to this point! That house really does suck though. You walk through the front door and there is a bedroom with ugly paneling and a door that closes it off from the hallway that leads to the rest of the house. The bedroom that the garage is converted into is really weird.... there is a built in fireplace INSIDE the closet. I'm talking a full on closet with doors and there is a fireplace in it??? Someone abandoned a car in the driveway and they still haven't had that taken away. It's been there for weeks, so maybe contingencies aren't removed?



Yeah, I expect things to really show the declines in Dec. I was surprised that the CS was as high as it was here.



Have we leveled in some parts of OC and/or some segments of the market?
 
My impression is that the answer is: We have not leveled.



Even at the very low end in OC, SA or GG or A, not leveled. Lately I'm seeing REOs offered in the low 200s. In the summer, the same places (3/1 1250sf, 6k lot) were in the low-mid 300s.



The high end is completely constipated with few sales and huge inventory (and even more people just holding out).



And NODs shot back up to the levels of the summer, so NTS will hit in Jan/Feb, with REOs to follow in Mar-Jun.



Not leveled. Do your refi as fast as possible, the comps won't be there in another month or two.
 
[quote author="asianinvasian" date=1231930054]<a href="http://en.wikipedia.org/wiki/English_grammar">http://en.wikipedia.org/wiki/English_grammar</a></blockquote>


Yes, please to be splainin'...I clearly need some skoolin'
 
I hear ya. I've literally been on this for a month now and can't believe it's taken this long to get to the point of an appraiser coming out. I've emphasized over and over to the bank that I want the appraisal yesterday. Grr.
 
Finally got the appraisal back today and thought some of you might be interested to see how things have declined in CM. We bought the house is May of '08 for $430K and the appraisal came back for $395K, so about -8% in 8 months. We have made some improvements, but overall dollars in the place aren't much. The appraisal today brings it to 46% off its peak! I think our zip code is around 41% off peak over all, but it encompasses higher end neighborhoods that haven't declined by anywhere near the average. Based on some pendings and other foreclosures that haven't hit the market yet, I fully expect a big step down in the next 30-60 days and I"m not talking 1%/mo.



Based on this, we're going to have to bring cash to closing on the refi, which I'm heavily leaning towards doing. Even if rates stay this low for the next year, the property will continually appraise lower and lower over that time, making the refi impossible. I'm thinking that the savings over the long haul is worth bringing cash to closing. Our overall mortgage balance will be about $10K lower. I know that extra $10K equity will evaporate nearly overnight. Is it better to have it in the bank or owe less on a depreciating asset, but have that asset financed at an unbelievably low rate?
 
<blockquote>2). He says that San Diego has leveled and that we are right around the corner. Not sure if SD has leveled, but he said that they started declining first, which I agree with. We actually were looking at north SD county in ?07.</blockquote>


Yeh, right. From today's San Diego Union-Tribune:



<em>Mortgage default notices up 121% over year ago



By Emmet Pierce (Contact) Union-Tribune Staff Writer

11:52 a.m. January 20, 2009

</em>

<em>SAN DIEGO COUNTY ? Notices of home-loan default in San Diego County spiked by 121 percent in December, dampening hopes that the housing market decline that began in 2005 is nearing its bottom.



In a sobering year-end report, the MDA DataQuick research firm on Tuesday said the notices, which mark the start of the foreclosure process, totaled 31,099 for 2008, a 54 percent gain over 2007's record of 20,138.



Home foreclosures totaled 1,253 in December, a monthly gain of 20 percent. There were 17,712 home repossessions by lenders within the county in all of 2008, a 141 percent increase over 2007.



The annual numbers were the highest since DataQuick began keeping track of county foreclosures in 1988 and defaults in 1992. They far outpaced the tallies of the mid-1990s, during Southern California's last big housing slump. </em>
 
[quote author="stepping_up" date=1232532494]Finally got the appraisal back today and thought some of you might be interested to see how things have declined in CM. We bought the house is May of '08 for $430K and the appraisal came back for $395K, so about -8% in 8 months. We have made some improvements, but overall dollars in the place aren't much. The appraisal today brings it to 46% off its peak! I think our zip code is around 41% off peak over all, but it encompasses higher end neighborhoods that haven't declined by anywhere near the average. Based on some pendings and other foreclosures that haven't hit the market yet, I fully expect a big step down in the next 30-60 days and I"m not talking 1%/mo.



Based on this, we're going to have to bring cash to closing on the refi, which I'm heavily leaning towards doing. Even if rates stay this low for the next year, the property will continually appraise lower and lower over that time, making the refi impossible. I'm thinking that the savings over the long haul is worth bringing cash to closing. Our overall mortgage balance will be about $10K lower. I know that extra $10K equity will evaporate nearly overnight. Is it better to have it in the bank or owe less on a depreciating asset, but have that asset financed at an unbelievably low rate?</blockquote>


If you aren't selling or walking away, might as well pump a little cash in to get a lower rate locked up long-term. Look at the extra cash like paying points. When is the break-even?
 
[quote author="ipoplaya" date=1232535207][quote author="stepping_up" date=1232532494]Finally got the appraisal back today and thought some of you might be interested to see how things have declined in CM. We bought the house is May of '08 for $430K and the appraisal came back for $395K, so about -8% in 8 months. We have made some improvements, but overall dollars in the place aren't much. The appraisal today brings it to 46% off its peak! I think our zip code is around 41% off peak over all, but it encompasses higher end neighborhoods that haven't declined by anywhere near the average. Based on some pendings and other foreclosures that haven't hit the market yet, I fully expect a big step down in the next 30-60 days and I"m not talking 1%/mo.



Based on this, we're going to have to bring cash to closing on the refi, which I'm heavily leaning towards doing. Even if rates stay this low for the next year, the property will continually appraise lower and lower over that time, making the refi impossible. I'm thinking that the savings over the long haul is worth bringing cash to closing. Our overall mortgage balance will be about $10K lower. I know that extra $10K equity will evaporate nearly overnight. Is it better to have it in the bank or owe less on a depreciating asset, but have that asset financed at an unbelievably low rate?</blockquote>


If you aren't selling or walking away, might as well pump a little cash in to get a lower rate locked up long-term. Look at the extra cash like paying points. When is the break-even?</blockquote>


34 months...looking at 15 years min of owning this place.
 
Thanks for the update on the refi. I'm still thinking about it and waiting (maybe getting greedy) for a lower rate. I'd listen to Ipo if I were you. I'll get my details together and ask his advice soon.
 
[quote author="mikal1" date=1232534997]<blockquote>2). He says that San Diego has leveled and that we are right around the corner. Not sure if SD has leveled, but he said that they started declining first, which I agree with. We actually were looking at north SD county in ?07.</blockquote>


Yeh, right. From today's San Diego Union-Tribune:



<em>Mortgage default notices up 121% over year ago



By Emmet Pierce (Contact) Union-Tribune Staff Writer

11:52 a.m. January 20, 2009

</em>

<em>SAN DIEGO COUNTY ? Notices of home-loan default in San Diego County spiked by 121 percent in December, dampening hopes that the housing market decline that began in 2005 is nearing its bottom.



In a sobering year-end report, the MDA DataQuick research firm on Tuesday said the notices, which mark the start of the foreclosure process, totaled 31,099 for 2008, a 54 percent gain over 2007's record of 20,138.



Home foreclosures totaled 1,253 in December, a monthly gain of 20 percent. There were 17,712 home repossessions by lenders within the county in all of 2008, a 141 percent increase over 2007.



The annual numbers were the highest since DataQuick began keeping track of county foreclosures in 1988 and defaults in 1992. They far outpaced the tallies of the mid-1990s, during Southern California's last big housing slump. </em></blockquote>


and you'll note that I closed with my assessment that the guy wasn't very sharp. I was merely sharing what an appraiser had to say tp give you all an idea that these people aren't exactly with it. Frankly, I"m astounded that an hour and a half of this nimwits services are garnering $350.
 
[quote author="stepping_up" date=1232535522]



34 months...looking at 15 years min of owning this place.</blockquote>


I'd do it. Over the course of those 34 months, your appraised value is sure to fall and mortgage rates are sure to rise. They might go a bit lower in the near future, but you could always consider refinancing again if that happened.
 
[quote author="tmare" date=1232535769]Thanks for the update on the refi. I'm still thinking about it and waiting (maybe getting greedy) for a lower rate. I'd listen to Ipo if I were you. I'll get my details together and ask his advice soon.</blockquote>


You have so much more equity that you can afford to wait and see. I wish we were in that position because I'm nearly certain that there will be great refi deals for a while and likely that it will only get better. At some point this place is going to become a rental, so my thinking is that lowering the carrying costs is really beneficial.
 
[quote author="stepping_up" date=1232535928][quote author="mikal1" date=1232534997]<blockquote>2). He says that San Diego has leveled and that we are right around the corner. Not sure if SD has leveled, but he said that they started declining first, which I agree with. We actually were looking at north SD county in ?07.</blockquote>


Yeh, right. From today's San Diego Union-Tribune:



<em>Mortgage default notices up 121% over year ago



By Emmet Pierce (Contact) Union-Tribune Staff Writer

11:52 a.m. January 20, 2009

</em>

<em>SAN DIEGO COUNTY ? Notices of home-loan default in San Diego County spiked by 121 percent in December, dampening hopes that the housing market decline that began in 2005 is nearing its bottom.



In a sobering year-end report, the MDA DataQuick research firm on Tuesday said the notices, which mark the start of the foreclosure process, totaled 31,099 for 2008, a 54 percent gain over 2007's record of 20,138.



Home foreclosures totaled 1,253 in December, a monthly gain of 20 percent. There were 17,712 home repossessions by lenders within the county in all of 2008, a 141 percent increase over 2007.



The annual numbers were the highest since DataQuick began keeping track of county foreclosures in 1988 and defaults in 1992. They far outpaced the tallies of the mid-1990s, during Southern California's last big housing slump. </em></blockquote>


and you'll note that I closed with my assessment that the guy wasn't very sharp. I was merely sharing what an appraiser had to say tp give you all an idea that these people aren't exactly with it. Frankly, I"m astounded that an hour and a half of this nimwits services are garnering $350.</blockquote>


Yes, it was noted.



I wish I had a solid argument against throwing any cash into a closing, I just know that I'm not very comfortable with your scenario. I guess if you're comfortable that we will be able to avoid any significant deflationary spiral, that you have a secure job, and that the additional depreciation of your property won't be too significant.... You know that each dollar put into the refi today will be worth less than a dollar next year. What might that dollar be worth if you didn't put it into the refi? Versus what you save with your new rate I suppose. I'm just thinking out loud. If we succeed in inflating out of what appears to be a deflationary period, does that make investing more cash into your property now a better move? Well, I guess I should think about it a it rather than just rambling on. LOL
 
[quote author="stepping_up" date=1232535522]

...looking at 15 years min of owning this place.</blockquote>


I'll be ready... :)

I will want a full 6% of your recipe book for commission.

Don't try to haggle it down to 4.
 
[quote author="stepping_up" date=1231929277]...the agent has a friend or family member lined up to snag it. It goes on the MLS for one day to show the asset manager that they are doing their job. </blockquote>


My only question is where can I find such a realtor to let me be the partner in crime?
 
lenders aren't dumb. they know exactly what market price is. they might sell 5-10% below market, but that's about it. even if the listing price is low and a relative makes an offer, the lender is not likely going to approve of the sale if the price is too low.
 
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