AZ Republic Article on Appraisals - Response
For those of you who missed it, the Republic blaming appraisers for the current real estate market. Here is the link to the original article: http://www.azcentral.com/realestate/articles/0106appraiser1230.html and below is a more objective look at the current market condition.
I am again appalled at the sensationalism that the Republic has brought to bear on the real estate industry. Let’s add some real perspective and education to this very poorly written article.An appraiser’s job is to determine market value. In the 2005 market, there was an incredible lack of supply of homes and an average to high level of demand. Naturally that causes prices to rise. In our case, prices rose very quickly. As prices increased, fewer buyers were available (fewer people qualified for the higher cost of housing). Demand fell off. At the same time, many people that bought, decided to sell (many of which were investors). This relaxed demand and increased supply caused prices to relax as well, and in the case of some areas of the valley, prices have fallen. Basic economics. This phenomenon could not be ignored by appraisers who correctly recognized that the market was moving upwards. Value is the price one buyer and one seller agree to exchange property on. People were willing to pay a higher price, therefore the value of the property was higher.
As for the homeowners who used the equity in their home through HELOC or refinancing, your home was never intended to be an ATM. Lenders appraisal standards for HELOC and refinance products are often less stringent. A “Full” appraisal is often not required.
I am disappointed that the Republic feels it must blame someone for market conditions that natural economic forces have brought to bear. Now, don’t get me wrong, I’m sure that mortgage fraud that involved some inflated appraising has gone on, but not to the extent that this article implies.
(1 votes, average: 5 out of 5)
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