From Beer Puns To The Lack of Housing Homeruns

May 8, 2020

As we move forward through this global pandemic, it has become quite apparent that we need more puns. And not just any pun. We need puns about beer (it’s Friday after all).

And if that’s not enough, surfing will do.

But I digress…

ABC World News Tonight – The Urban to Suburban Shift

Got a nice shout out in this World News Tonight piece by Deirdre Bolton in her new ABC gig. This urban to suburban narrative is already underway, initially via the rental of single-family homes in the surrounding NYC suburbs. I’m not sold yet on the idea that this is a permanent structural change so don’t write off cities just yet.

[From my Matrix Blog] Manhattan Crisis: What Does Our Housing Past Tell Us About Our Housing Future?

Hint: Not so much.

In this Sunday’s New York Times Real Estate Section (online now), the Calculator column featured some data trends I’ve gathered during two significant prior housing market events: What Can 9/11 and the Great Recession Tell Us About Coronavirus Recovery?

The Unemployment Level Surges Ridiculously But Is It Short Term?

Today’s unemployment numbers are blowing away records set in the Great Depression…

…But I wonder if this infers some sort of partial snap back in relatively short order as local economies gradually open (not factoring in a second virus wave in states that paid little attention to shelter in place practices).

I haven’t yet run into any notable discussions about the length of time these high unemployment numbers might persist. Please share any thoughts on this you might have.

COVID-19 Is Battering The Already Battered Luxury Market

Not that type of batter.

There were several excellent articles on the state of the U.S. housing markets. Luxury markets were generally weak going into the COVID-19 crisis due to over emphasis on that sector.

– Coronavirus hammers the already battered NYC luxury housing market [Yahoo Finance]

– Gauging the outlook for the luxury housing market [Washington Post]

– Where the Market Has Stalled: 10 Cities With the Steepest Drops in New Listings [Realtor.com]

– Coronavirus Florida: Is Palm Beach’s once-booming real estate market starting to recover? [Palm Beach Daily News]

Another way to look at the emptiness of NYC

Untapped New York is an excellent site that talks about this fascinating short film. I’ve been to most of these locations and the lack of activity is unnerving.

Getting Graphic

Len Kiefer‘s Chart Handiwork

Upcoming Speaking Events

After my talk for Barron’s Live last week, I got a call from a construction trade group in Baltimore Maryland. All aspects of the real estate vertical are starving for information.

Appraiserville

(For earlier appraisal industry commentary, visit my old clunky REIC site.)

Dave Towne explains ‘modified’ “exterior” and “desktop” appraisals extended to June 30

From McKissick: On May 5, 2020, Fannie Mae announced that the temporary appraisal flexibilities that were outlined in Lender Letter 2020-04 (LL-2020-04) have been extended until June 30, 2020. Freddie Mac made a similar announcement, also extending their flexibilities until June 30.

However, I look to the prolific writer of all things appraisal Dave Towne to bring clarity to the technical changes in the real estate community.

___________________________________________
Appraisers…..

On March 23, 2020, the GSE’s (FNMA & FrMAC) issued new instructions describing how to do ‘modified’ “exterior” and “desktop” appraisals during the Covid-19 time frame (which has been extended to June 30).

Based on thousands of appraisals submitted to the GSE’s since the allowed changes, reports are that appraisers are NOT FOLLOWING DIRECTIONS in the ‘modified’ instructions.

As I have repeatedly said, appraisers must take time to READ THE INSTRUCTIONS issued by each ‘agency’ which currently allows ‘modified’ reports to be done. There are differences between them.

Danny Wiley, with FrMAC, wrote the following message, and asked that many of us circulate it to as many appraisers as possible. This applies to appraisals going to either GSE:

“As we are examining the appraisal reports that are being submitted under the COVID-19 flexibilities, the number one issue we are seeing is related to exterior only appraisals and the analysis/reporting of the interior condition.

For GSE work, it is NOT acceptable to simply assume that the interior condition is “average.” Nor is it acceptable to assume that the interior condition is similar to the exterior condition. Many non-GSE users do allow (and even instruct that) appraisals completed with such assumptions, but these assumptions are not acceptable for GSE work.

The appraiser MUST have a data source for the interior condition. The data sources could include any of the types of sources normally used for comparables. Or, under the revised COVID-19 certs, the data could include information provided by the owner, occupant, agent, etc.

If one cannot obtain a data source for the interior condition, then the appraisal should not be completed. However, the intent of adopting the revised certifications and allowing use of data by the property owner was to minimize the number of cases where the appraiser could not obtain such data.”

Let me add here that using the now-many applications designed to allow someone other than the appraiser to take interior photos and send those to the appraiser is perfectly acceptable for the ‘modified’ “exterior” and “desktop” appraisals.

However, when the assignment is for a traditional Interior/Exterior report, using secondary sources for interior info is not acceptable….per the Scope of Work on the appropriate form. This is no different than what Danny wrote above, in terms of appraiser responsibility.

Dave Towne, MNAA, AVAA, AGA

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Appraiser and RAC member Terri Love comments on Pennsylvania’s non-essential real estate classification

My good friend and leading Pittsburgh appraiser Terri Love was interviewed by Pittsburgh TV station WTAE, to bring awareness to the non-essential classification of real estate appraisers and brokers. They number about 100,000 in the state, yet Pennsylvania remains an “island” in comparison to the actions of their surrounding state neighbors who have classified appraisers as “essential.”

This article describes the situation in Pennsylvania.

OFT (One Final Thought)

And to those who have been taking CE classes and mastering some basic housekeeping skills, here is something to aspire to:

Brilliant Idea #1

If you need something rock solid in your life (particularly on Friday afternoons) and someone forwarded this to you, or you think you already subscribed, sign up here for these weekly Housing Notes. And be sure to share with a friend or colleague if you enjoy them because:

– They’ll change the sheets;
– You’ll think of a clever pun;
– And I’ll think about the future of the housing market.

Brilliant Idea #2

You’re obviously full of insights and ideas as a reader of Housing Notes. I appreciate every email I receive and it helps me craft the next week’s Housing Note.

See you next week.

Jonathan J. Miller, CRP, CRE, Member of RAC
President/CEO
Miller Samuel Inc.
Real Estate Appraisers & Consultants
Matrix Blog
@jonathanmiller

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