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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: koan who wrote (265532)	8/1/2010 2:07:44 PM
From: Valuepro	Read Replies (2) \| Respond to of 306849

O.k., my friend, your are starting to sound like the typical real estate agent - not that you are - who may know everything about marketing, but only thinks they know something about value. "I did not see a comprehensive argument nor many correct facts. The appraisals in my town are as honest and accurate as mankind can get. And you do not seem to know jack about real estate. Maybe, as you say, I don't know jack about real estate, so perhaps my retirement is a myth too, after having spent 30+ years in the San Francisco Bay Area as a teacher, credentialed professional, and peer group leader in the field of real estate economics. In that time, ending in '02, I was a consultant for major corporations, universities, insurance companies and law firms. Please note that I never attacked the honesty of the appraisers in your town. I said that appraisals are faulty. There is a difference, and that related to competency more than anything else. Also, I wonder how it is that you would know that the appraisals are accurate? Is it because they always "hit the number?" How can any appraisal be accurate anyway? They are, after all, an educated guess, often supported buy an existing contract being the best evidence of value - not proof, but evidence. And, appraisal management companies (AMC) in recent years essentially took over the appraisal market for single family homes. This drove a lot of experienced and well qualified appraisers out of the market, because appraisal assignments most often went to the least qualified and least experienced appraisers, those who were/are most willing to work for half the fee they could have otherwise (in addition to hosting all of the costs of doing business). AMCs essentially promised clients a marketable appraisal at any location in the country for a competitive fee and in a very short period of time. If the appraiser was too slow, or could not meet the number, they did not get repeat business. Then, every appraiser went about their business more as clerks filling out forms and using information on other loan closings, closings that were backed by similarly not-to-well-supported appraisals. Then, appraisal management companies were taken over by banks. What we had when the crisis hit was bank-owned appraisal companies providing profits to banks for this service, and assisting helping banks sell poorly backed packages of loans underwritten by appraisals they commissioned. This was very unlike the old days when S&Ls did their own appraisals, but they also tended to hold onto those loans for investment purposes, so the appraisal function, then, was self policing. If an in-house or outside appraiser could not "hit the number" that was respected, because it was viewed as saving the institution a potential problem. Not these days. The so-called appraisal reforms instituted under Clinton, since you want to bring presidents into this argument, was merely a bank takeover of what had previously been a process completed by more highly competent practitioners. "And you skip the facts of the melt down, Bush's involvment and basic economics altogether." I'd reply but I'm sure I understand. "In the words of H. L. Mencken: '"For every complex problem there is a simple answer - and it is usually wrong."' By this are you being a critic of what I said, or of yourself? "Your lecture was simple and wrong. Just sounded like the typcial uninformed right wing rant to me. However, you did hit all of Beck's and Palin's talking points. good you." My personal politics has nothing to do with real estate principles of value and basic economics. Now cool down, and have beer. I'd recommend Oak Creek Amber Ale, but I don't think it's for sale outside of Arizona. Cheers, VP in AZ