Lowball Appraisals Spark Uproar

In San Diego, Steve Doyle, division president for Brookfield Homes, is trying to close out the final 20 houses of a 120-unit single-family subdivision at prices ranging from $340,000 to $350,000. But recently there’s been a major hitch as appraisers assigned by banks are coming in with valuations of $60,000 or more under Doyle’s selling prices. The appraisers, who Doyle says are inexperienced, unfamiliar with local market trends or both, are using distressed sales — foreclosures and short sales — as their “comparables.” Some of the distressed properties are in poor condition, and all of them offer fewer amenities, Doyle says.

In the suburbs near Cleveland, Enzo Perfetto, manager of Enzoco Homes, builds custom houses on clients’ lots. Recently, he said, banks have begun assigning appraisers from far outside the area to value lots as part of mortgage packages on new homes. Some of the comparables they use are in foreclosure situations, and that depresses land valuations. A young couple who paid $75,000 for their lot recently had it valued at just $30,000 by an out-of-area appraiser who looked only at online data, according to Perfetto — discouraging the couple from proceeding. “I think the pendulum is swinging way too far in the wrong direction on appraisals,” Perfetto said. Bank-assigned appraisers often “don’t know the local market and they’re going for low numbers to be ‘safe.’” (www.washingtonpost.com)
Washington Post (7/4/09); Kenneth R. Harney

San Antonio Continues to Thrive

1. San Antonio had the 5th largest population growth in the country, adding 25,642 people in the past 12 months. That was 1.9% growth. (source: Express News)

2. Medtronic will create more thatn 1,400 jobs in its new Diabetes Therapy Management Center in San Antonio. We currently have 120,000 medical/biomedical jobs in San Antonio with a $16 billion payroll. (source: Express News)


3. Boeing Co. is going to hire 100 new employess to work Air Force planes at Kelly AFB. (source: SABJ)

Haas Residence

UNDER CONSTRUCTION
Quaint 3 BDR 3 Bth, Office, Game/Media Room, located in Laurel Canyon Ranch. Home will feature Cambria counter tops which is a natural quartz product that is environmentally safer than granite.

Big Boost in Housing Demand Expected From Echo Boomers

Depicting the current housing downturn in sobering terms, the 2009 "State of the Nation’s Housing" report released by Harvard University’s Joint Center for Housing Studies on June 22 nevertheless gives home builders firm assurances of a resurgence in demand once the echo-boom generation gains a footing in the housing market.

Born from 1981-2000, members of the echo-boom generation, Harvard says, will boost annual average household growth to more than 1.25 million during the decade of 2010-2020 — even under the worst of circumstances.

“While the economic crisis has dampened household growth, the sheer size of the echo-boom generation will give a powerful boost to long-run housing demand,” the report says.

Even under the weaker scenario, in which there would be 2.3 million fewer household formations in 2010-2020, average annual household growth can be expected to be comparable to the growth experienced from 1995-2005 as members of the echo-boom move into the prime household formation and home buying ages of 25 to 44.

“The number of echo boomers aged 25 to 44 will eclipse the number of baby boomers when they were those same ages by more than 5.9 million,” according to the report.

“With the number of households in this age group projected to increase between 2.0 million and 3.4 million, the demand for rentals and starter homes will surge,” the Joint Center says. “Meanwhile, with their longer life spans and sheer numbers relative to the preceding generation, the baby boomers will add dramatically to the number of households over 65. This will lift demand for retirement communities as well as services and home improvements that help seniors age in place.”

“With the echo baby boom driving demand for starter homes and apartments and the baby boom powering demand for homes suited to older Americans,” the design professions will be called upon to deploy new technologies and designs to meet the aesthetic tastes and functional needs of a new, more diverse younger generation on the one hand and a generation in need of home modifications to help them age more safely and healthfully in place on the other,” said Mohsen Mostafavi, dean of the Harvard University Graduate School of Design.

Garczynski said that the recovery is likely to be slow and spotty, beginning in places that did not experience unsustainable increases in housing production during the boom years. “Generally speaking, housing markets closer to the urban core and job centers could be on the leading edge of the recovery. Outlying rings of metropolitan areas will recover later once the inventory of unsold units declines to more normal levels.”

He also noted that demand for infill and higher density development could increase markedly in the period ahead. “This will require a spirit of cooperation between builders and the local officials who control the zoning and development process,” he said. “Hopefully, this will lead to greater acceptance of the smart growth principles NAHB has been advocating since the beginning of this decade.”