Roughly thirty years ago, after we launched our appraisal firm, our developer built an app to run it…and we were Mac die-hards. The app was called “AppleTrac” – not because of our location in the “Big Apple” but because we loved Apple Computer in 1986 and the release of the Mac Plus. I fondly remember the first demo where our developer added a menu item called “Comp THIS” to begin the appraisal from the order information. This phrase could only be said in a sarcastic tone, emphasis on the second word. Later iterations were named “Manhattan Transfer” and then “Rudie Can’t Fail.” The last appraisal database was a Clash song name – given by my friend and developer – sadly he passed away unexpectedly before the system was finished. We adamantly agreed that every database and app we created would be named for a Clash song and I continued that tradition afterwords. “Lost in the SuperMarket (nicknamed Super Market),” “Charlie Don’t Surf (launched when my son Charlie was born),” “Clampdown” and others were used.
For all my loyal readers who aren’t appraisers, please bear with me. This is going to be an appraiser-centric Housing Notes because of what has come to light on the actions of the national level of our largest industry trade group, The Appraisal Institute. Outrage from Appraisal Institute chapters and the membership is exploding, in what has turned out to be a blatant power grab by disconnected national leadership. This has turned out to be a case study in leadership in a silo.
but I digress…
Mortgage Rates and the FOMC Move
Well the FOMC made their move on Wednesday at 2pm ET and opted to raise their federal funds rate by 25 basis points (0.25%). In the aftermath of the election, a December increase became a near certainty. However there was a widespread belief that the rate increase would be larger, i.e. 50 or 75 basis points. I do think post-election economic euphoria is over blown. The 0.25 move was indicative of the Fed seeing something all the pundits don’t see. Still I don’t think we will see a negative impact on housing.
Here’s why. For a good, short interview/explanation listen to Fannie Mae Chief Economist Doug Duncan. I moderated a panel for an Inman conference in San Francisco a while back. He was a panelist so I had the pleasure to speak with him in public and private. Listen for the point he makes about interest rates and sales volume.
If you haven’t seen the chart majesty of Len Kiefer, Deputy Chief Economist at Freddie Mac, you need to. Lots of good stuff that is beautifully presented. Click on the chart below to start it up.
Now to the hard core content of the week….
As I write this Housing Note, an appraiser is inspecting my house for a refinance. Really! We locked in our rate on Monday in anticipation of the FOMC announcement on Wednesday. The appraiser has lived in our community for two decades and appraises in it. He has local market knowledge, something that is not being appreciated in the current AMC system. We had a great conversation about the state of the industry and I gained some valuable insights.
There is a lot to cover today so here goes:
Creating an information repository on the actions of AI National
I will have a central repository for all the documents and commentary on a web site we whipped up last night and are finalizing today. Someone pointed out that many AI members and chapters only have pieces of the story. The name of the web site is a URL I’ve owned since the financial crisis. I’ll update it here and email it to anyone that wants it once it is ready to go. Hopefully later today.
Free Real Estate Appraiser Webinar Presented by the Network of State Appraisal Organizations (NSAO)
The Network of State Appraisal Organizations are those state coalitions you’ve been reading about that have sprung up across the country. They fill the void that the Appraisal Institute has not served for more than a decade and they are run by volunteers. It’s important to show grassroots support and besides, it is free (and might be done quarterly). I just registered for it – it is just a couple of clicks. Click here for the flyer. Clicking on the following banner will take you to the registration page.
Compelling the Appraisal Institute to work for its members
A post I wrote last week went viral: Sadly, The Appraisal Institute is now working against its local chapters. The message struck a nerve after more than a decade of limited or no communication from AI National on what they are doing on the many important issues facing appraisers. I followed up with a post this week detailing how AI National was going to take and control access to all chapter’s cash with no logic behind it: Incredibly, The Appraisal Institute is taking chapter “excess cash” and charging them for the privilege. I’m no longer an associate member of AI. I quit in disgust after they left the Appraisal Foundation and made the same blathering statement about “we are excited about the future…”. The tone of the president’s message announcing this new unveiled policy provoke outrage on my part because it felt like history repeating itself.
There are a slew of AI chapters writing letters of outrage to AI National right now. Here’s a couple I saw yesterday:
Ironically, AI National is located in Chicago and even the Chicago Chapter letter expressed disbelief in the lack of communication. Much like the New York Metro chapter and all others, the language is one of disbelief and anger. Nothing is being held back.
AI thinks my criticism is “mythical”
RAC, a boots-on-the-ground-appraisal-organization run by appraisers, for appraisers
On another note, I am the incoming President of RAC. I’ve been a member for 20 years and have always cherished my professional and personal relationships with the members. Here’s a little introduction.
A Brilliant Idea
If you need something rock solid in your life (particularly on Friday afternoons) and someone forwarded this to you, sign up here for these weekly Housing Notes. And be sure to share with a friend or colleague if you enjoy them. They’ll realize that lobsters ruled the earth before rubber bands were invented, you’ll remember where you spent the happiest days of your life and I’ll understand why my writings on these issues are seen as “mystical”.
See you next week.
Jonathan Miller, CRP, CRE
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Reads, Listens and Visuals I Enjoyed
- Small Investors Join China’s Tycoons in Sending Money Abroad [NY Times]
- The New Suburbia: More Urban [NY Times]
- Abilene police make arrest in connection with murdered real estate agent [Housingwire]
- Sign of a Real Estate Slowdown as Queens Clock Tower Changes Hands [NY Times]
- American Cities Yell Ni Hao to Millions of Chinese Tourists [Bloomberg]
- More amazing ways to visualize mortgage rates [Len Kiefer]
- Starter-Home Inventory Down 12% Over the Past Year [National Mortgage News]
- Russian Building Going Up From the Top Down [NY Times, 1974]
- Video: Why Rising Mortgage Rates Won’t Hurt Home Prices [National Mortgage News]
- The Truth About Economic Mobility [Citylab]
- Five Big Questions About the 421-a Tax Break Deal [City Limits]
- 27 embarrassing real estate ad fails that will have you cringing [BuzzBuzzHome]
- Which Boston neighborhoods will gentrify next? [NeighborhoodX/Curbed Boston]
- Luxury Buyers Impacted By Wall Street Performance Rather Than Interest Rates [Mansion Global]
My New Content, Research and Mentions
- Concessions are so crazy that landlords may (finally) have to start lowering rents [Brick Underground]
- Multimillion-Dollar Penthouses Sell in New York’s Lower East Side [WSJ]
- Pricey penthouses at 215 Chrystie, 1 Manhattan Square go under contract [The Real Deal NY]
- 6 things you need to know about 2016’s Manhattan resi market [The Real Deal NY]
- Nothing helps you beat the cold like a sauna in your apartment [Brick Underground]
Appraisal Related Reads
- Estate Appraisal Process Part 1 [Straw Hat Enterprises]
- Our President [RAC]
- Newz .Unique Airports .Deregulation and Appraisers.Victorians Under $200,000 [Appraisal Today]
- AI Current Path is a Serious Issue for ALL Appraisers [Appraisersblogs]
- Why an appraisal should be part of every agent’s pricing strategy [Birmingham Appraisal Blog]
- Selfies, market hotness, & waiting to sell (and a Sacramento update) [Sacramento Appraisal Blog]
- Podcast: Ritholtz’s Masters in Business: Aswath Damodaran Interview [Bloomberg]
Extra Curricular Reads
- Craig Sager, Colorful N.B.A. Sideline Reporter, Dies at 65 [NY Times]
- The Four-Letter Code to Selling Just About Anything [The Atlantic]
- Uber, Lyft, and the future of transportation in Austin [Curbed]
- What Happens When Bodega Food Gets Fancy? [Citylabs]
- Why Canadian lobster has become unaffordable for most Canadians [Globe and Mail]
- Watch Joe Walsh, Dave Grohl Play Funk #49 (with Paul Allen) [Rolling Stone]
- Post-Punk 101: What Is Post-Punk? [Observer]