I was recently asked what’s up with small acreage home-sites in the Washougal, WA area.  The sales presented in the MLS were reviewed.  This is a macro overview of the recent market activity in MLS area 33.

Home-sites in the range of 2.5 acres to 6 acres were reviewed.  This size range included the most activity and represented the most common site sizes for residential housing.

What I found was that in all of 2006 there were 10 sales that fit the criteria.  They had a sale price range of $149,000 to $315,000.  The average was $200,090.  The average days on market was 88.

In 2007 there were 15 sales reported.  They had a sale price range of $110,000 to $269,000.  The average was $185,043.  The average days on market was 134.

In the last six months the stats were:  Price range from $140,000 t0 $210,000 with an average of $175,375.  The average days on market was 175.

So, as you can see, the average price went from $200,000 to $185,000 to $175,000.   And, the average days on market went from 88 to 134 to 178.

Looks like the market for small acreage in Washougal is experiencing the same kind of market the rest of the Metropolis is experiencing.

Ralph Olsen, Appraiser

Pacific West Appraisal Services, Inc.

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I got a phone message from a loan officer at ‘Great Big National Lender’ yesterday, a very familiar company you’d all know the name of.  The loan officer wanted me to “check the value” on a property and if it did not reach a certain level they would not initiate a loan.

For those of you that don’t know it, it is illegal to do such a thing.  In the first place, I don’t know any more about the property than the loan officer does at this point.  In the second place, to do what the loan officer asked IS AN APPRAISAL.  To do such an appraisal legally there must be an auditable file to support the verbal report to the loan officer.  And, thirdly, Fannie Mae frowns on that kind of activity quite harshly.

I called the lender to see what their policy was.  They not only forbid such behavior, they have a team set up nationally to monitor and discourage such activity.

There was a time when such illegal activity was ignored by most lenders.  Some have always supported appraiser independence.  Without appraiser independence from the influence of loan officers the appraisals often become biased to the result the loan officer is looking for regardless of what the actual market value of the property might be.

Ralph K. Olsen,  Appraiser

Pacific  West Appraisal Services, Inc.

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FHA appraisal requests are up significantly this year.

I was a specialist for FHA appraisals before they went to lender selection of appraisers in the early 1990’s.  The FHA had chosen several appraisers locally to watch for indications of fraud in the market; flips and contract fraud, etc.  After lender selection of the appraiser went into affect seems the lenders did not want those appraisers that followed the FHA rules to do their appraisals.  They wanted those appraisers that would respond to the whims of the lender and not adhere to FHA insurance needs.  Then, the FHA got into trouble and the appraisers got blamed.  Probably rightly so.  At least, to blame the appraisers that ignored the FHA concerns about property condition would be justified.  But, those appraisers were chosen by the lenders for the appraiser’s pliability, not their integrity.  Oh, those rascally lenders.   Seems the stories about the lenders mistakes keep coming up, then someone else gets blamed and the lenders get bailed out.  They are all about FREE MARKETS until they stumble and fall.  Then it is “Where’s my government bail out?”    But, I’m whining, aren’t I?

Fannie Mae is now looking at the possibility of black listing lenders who manipulate the appraiser into producing fraudulent appraisals.  The pendulum has swung.  I have been complaining to FNMA since the 1980’s about the lenders black listing appraisers for not committing fraud on the lender’s behalf.  I guess a lonely voice was inadequate to affect the change.  A few hundred billion dollars in losses and loss of market confidence seems to have gotten their attention.

Ralph K. Olsen,  Appraiser

Pacific West Appraisal Services, Inc.

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Several days ago I did an appraisal of a house in the Woodlawn district of northeast Portland.  It is a house that is about five years old amongst a lot of houses that are 50 to 100 years old.  There are many of these newer infill houses in that part of town. (Appraisal Portland, OR)

The owner of this house paid $259,000 in the fall of 2006.  I completed the appraisal and concluded the current value is $225,000.  The average days on market for houses like this one, in that area of town was 85.  Not bad.  The high days on market for that data search was 230.

There is a lot of mixed indicators out there.  However, several recent experiences are suggesting some market areas are falling back, even if the larger district shows positive statistics.  We will keep watching.

Ralph Olsen, Appraiser

Pacific West Appraisal Services, Inc.

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