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JUNE 23, 2009
Home sales down: Kill the appraiser
The National Association of Realtors is spinning today's lackluster existing home sales news as a positive. Sales actually fell nationally when you compare May 2008 to May 2009.
(I expect Tampa Bay area sales in May to buck the national trend and show a year to year improvement. I'll post those numbers in an hour or two.)
Realtor economist Lawrence Yun is blaming appraisers for failing to value homes high enough:
First-time buyers also are being drawn off the sidelines by the $8,000 tax credit, which is helping to absorb inventory. However, the increase in sales is less than expected because poor appraisals are stalling transactions. Pending home sales indicated much stronger activity, but some contracts are falling through from faulty valuations that keep buyers from getting a loan.
Realtors said existing home sales came in at an annual rate of 4.77 million in May, 3.6 percent below the 4.95 million pace in May 2008.
That being said, appraisals ARE a problem. When appraisers include all the foreclosure sales, it makes it damned near impossible to refinance your house for anything near what you paid in 2005-2007. More Yun:
That being said, appraisals ARE a problem. When appraisers include all the foreclosure sales, it makes it damned near impossible to refinance your house for anything near what you paid in 2005-2007. More Yun:
Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales. In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment. There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected.
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