DHA Appraisal Blog

Working RE has been taking an appraiser survey on AMCs

Here's a quote:

" According to our survey, however, which now measures the collective response of over 3,500 appraisers nationally, the experience is mixed for the many appraisers who work with AMCs. Our Working RE/OREP HVCC Appraisers Talkback Survey supports the notion that appraisers are picking and choosing which AMCs to work with. This may be a hopeful sign."

" Consider these results: to the survey question: "Do you work with appraisal management companies (AMCs)?"; always 9%, often 33%, sometimes 46%, never 12%."

" To the question: "Overall, are you satisfied with the AMCs you do work with?"; always 3%; often 19%; sometimes 50%; never 28%."

To read more and take the survey, click here

http://www.orep.org/wordpress-2.7/wordpress/

More than 1,000 LoopNet members completed our poll on the Q4 commercial real estate market. Sentiment has turned more pessimistic since the Q3 survey, with 46% of respondents expecting a rebound in transactions to wait until 2011 or beyond, compared to 1/3 in our last survey. Still, the glass half full view notes that over half are still expecting a 2010 recovery. Get more detailed results, including expectations for pricing and the major obstacles that are standing in the way of a recovery on our blog.

See Results and Comments

By MICHAEL SASSO | The Tampa Tribune

Published: October 27, 2009

TAMPA - Despite fears of a looming crisis, at least one observer of the economy believes talk of a collapse in commercial real estate may be unfounded.

Tuesday morning, John Augustine, the chief investment strategist for Fifth Third Private Bank, revealed his relatively bullish outlook for the economy and stock market for 2010. He spoke to a small group of Fifth Third bankers and guests at the Tampa Club in downtown Tampa.

In the near future, some $400 billion to $600 billion of commercial real estate loans are set to mature, Augustine said. With so many banks reluctant to refinance loans lately, many are predicting commercial landowners to default en masse when they can't get new financing.

Augustine, who is based in Cincinnati, said that's not a certainty, though. For now, the stock market seems to believe in the future of commercial real estate, he said.

For example, the Standard & Poor's BMI REIT index, which tracks the performance of stocks of real estate investment trusts – publicly-traded firms that hold real estate – is up 4.7 percent over the past year, he said.

Big REITs, such as mall-owner Simon Property Group, have raised cash by issuing stock and debt and now sit on "war chests," with which they can buy property, Augustine said.

To be sure, most of the commercial property in Florida is held by small private companies and investors, not big real estate investment trusts. However, Augustine said he believes banks today have returned to profitability and, moving ahead, will be more willing to refinance commercial mortgages. That should prevent a commercial collapse, he predicts.

Among other observations, Augustine is predicting:

Talk of the next "bubble" in emerging countries. Over the past year, investment in emerging countries such as China, India, Brazil and Eastern Europe has gotten super-charged. An index that tracks emerging markets, the MSCI Emerging Markets index, is up 71 percent over the year.

Augustine didn't predict a bubble in emerging markets, but said he expects to see investors speculate about a bubble if things don't slow down.

No double-dip recession. This week, the government is expected to release gross domestic product figures that show a return to growth for the economy. Some economists worry that the country could exit the recession, only to fall back into another one. However, Augustine said that massive amount of stimulus money from the federal government should prevent such a double dip in the economy.

Reporter Michael Sasso can be reached at (813) 259-7865.

from ASA Fast Read Oct 20, 2009

ASA, joined by the Appraisal Institute (AI), the American Society of Farm Managers and Rural Appraisers (ASFMRA) and NAIFA, sent a letter to Reps. Nydia Velazquez, chair, and Sam Graves, ranking member, of the House Small Business Committee in response to claims that real property appraisers, when they value a new purchase, are improperly incorporating foreclosures and distressed properties as part of the valuation process without properly adjusting the value of comparables based on their physical condition. ASA and its partners noted that experienced appraisers already account for the unique characteristics of foreclosed and distressed properties when doing an appraisal, and that part of the issue involves AMCs which are assigning less experienced and unaccredited appraisers to complex valuations. The letter goes on to recommend a number of steps that could be taken to address the concerns, such as seeking out appraisers with professional designations, providing sufficient time for a thorough valuation to be completed, and promoting communication between appraisers, home builders, and real estate agents.

In addition, the letter states that, while overall appraisal costs have gone up, this is due to costs imposed by AMCs, whereas appraisers have seen as much as a 60% "cramdown" of their fees, leading some in the profession to consider leaving altogether. The letter also notes that much of the fees being assessed by AMCs for administering the appraisal process are not being listed apart from the appraisal fee item located on the HUD-1 statement, which is shaping perceptions of appraisal fees. Click here to read the letter.