The longer I appraise homes for purchases, the less I understand about how homes are properly and ethically priced for listings! This post is about an example in the Greater Baton Rouge housing market I recently experienced. THE HOME DID NOT APPRAISE FOR THE PURCHASE PRICE! AND, this was one of those deals where they tried to roll in excessive seller paid concessions.

Disclaimer. In order to protect the identity of the Agent and the home in question, which is still Pending, details as to location and physical address are withheld.

Physical Details. Subject or home under contract is located somewhere in Greater Baton Rouge. Subject is 20 years old, 1,750sf to 2,000sf 3 bedrooms, 2 bathrooms located in a restricted subdivision where the homes are similar size and age. There is 1 sale and current listings in this development. Price range is somewhere between $180,000 to $220,000. While subject is in good condition, it’s not updated and has some inferior vinyl flooring.

Appraisal Inspection Setup & Request For Comps Used To Market Subject. As is my custom, at the same time the appraisal inspection was setup, the comps used to market the home were requested from Listing Agent. I’ve always believed that there are 2 to 3 real estate professionals involved in the sale or purchase of a home: the Listing Agent, Selling Agent and The Appraiser. Agents do know and see things in the market that appraisers do not and I want to know what I might be missing about a deal. School district could be an example. And, by requesting the comps up front, I hope to avoid an appeal or rebuttal later.

Home Was Priced High And The Sellers Gave it Away! Before visiting subject, I noticed subject was priced high and Agent provided 5 “sales”, which turned out NOT to be true comps. When I arrived at the home, the sellers were obviously nervous and were asking me questions about the appraisal and comps and making stating statements like, “I hope the home appraises with the extra concessions rolled in because we have a contract on another home…..”

The “Sales”, not “Comps” Sent. Also, Note That Appraisal Is Being Completed In March 2011 and Lenders Want Comps Within 90 to 180 Days Or 3 to 6 Months. Here’s a review of the 5 sales sent to me.

Sale #1, sold in 4/2010, is 200sf smaller in size, is similar in age but is updated. While this sale can be added a supplemental comp, this “sale” is too old for underwriters in 2011 to give heavy consideration to it.

Sale #2, sold in 6/2010, is 240sf smaller in size, was built in 2006 or is 5 years old, is located in a newer development with a newer design/appeal. So, design/appeal, age, location and condition are all superior. How is this “5″ year old home comparable to a 20 year old home? The 240sf difference in size raises the gross and net adjustments above underwriter tolerance of 15%, which indicates it’s not truly a comparable. Also, the 6/2010 “sale” is too old for underwriters in 2011 to give heavy consideration to it. I couldn’t believe what I was seeing here!

Sale #3, sold in 8/2010, is 312sf smaller in size, was built in 2005 or is 6 years old, is located in a newer development with a newer design/appeal AND an IG Pool. So, design/appeal, age, SLAB GRANITE COUNTERS, location, IG Pool and condition are all superior. How is this “6″ year old home comparable to a 20 year old home? The 312sf difference in size raises the gross and net adjustments above underwriter tolerance of 15%, which indicates it’s not truly a comparable. Also, the 8/2010 “sale” is too old for underwriters in 2011 to give heavy consideration to it. I couldn’t believe what I was seeing here!

Sale #4, sold in 10/2010 is within 75sf of subjects size, BUT was built in 2000 or is 11 years old, has a newer design/appeal AND is located on a half acre subdivision lot. So, design/appeal, age lot size and condition are all superior. How is this “11″ year old home comparable to a 20 year old home?

Sale #5, sold in 6/2010, is within 75sf of subjects size, is similar in age and condition. While this sale can be added a supplemental comp, this “sale” is too old for underwriters in 2011 to give heavy consideration to it.

What I did and didn’t do! This appraiser ended up using Sales 1, 4 & 5 in the report, Sale 4 simply because of the lack of sold homes in this market, along with 2 other more recent solds to comply with underwriters wanting more recent comps. This appraiser did not bend ethics and use Sales 2 & 3 as there was NO remote similarity to the subject and 5 & 6 year old homes. And, per lender requirements, this appraiser also added 3 listings into the report from the immediate market, of which were located in subjects own development.

THIS IS NOT A HOUSING MARKET OF STRENGTH AND….THIS POST HURRICANE KATRINA MARKET IS UNDERSTANDABLY AND LOGICALLY STILL CORRECTING! While GBR is performing better than the general U.S. housing market, we do face challenges. There has been a barrage of economic data and news suggesting national economic malaise in the housing sector with no signs whatever of even price footing, U.S. home prices continue to fall, and Corelogic and Baton Rouge Business Report reporting that Greater Baton Rouge is in its’ 6TH STRAIGHT MONTH OF HOME PRICE DECLINES. Greater Baton Rouge also has a fore closure and shadow inventory problem with 22 months of current shadow inventory. I’m not here to put down our market, but I do believe it’s about time we admit the challenges and price local listings accordingly, especially in the under $300K range where it really matters. The over $300,000 market appears to be weathering this downturn better than the under $300,000 markets.

WHAT I DON’T SOMETIMES SEE IN THE GBR HOUSING MARKET. What I don’t see sometimes, not all the time, are GBR home listings priced according to these facts and trends above! Some homes are priced as if it were still 2007. Homes shouldn’t be listed based on the sellers dictating listing price but rather based on market support and a little cushion for negotiation and normal seller concessions.

LOW APPRAISALS. And, when homes are overpriced, this is why that “low appraisal” occurs. Low Appraisals could be the result of a faulty appraisal, and/or it could be more about bringing reality to the situation and reflecting a flaw in the expectations created by a faulty and unrealistic listing pricing at the beginning of the process. This is exactly the example I have provided in this article, the totally unrealistic listing price for this home that didn’t appraise. And, it didn’t appraise based on the Agent’s 3 actual comps and the 1 sale and 2 current listings in the subjects own development. I believe those 5 & 6 year old “sales” provided were to help prop up the deal, which didn’t happen with this appraiser!

REASONS FOR LOW APPRAISALS. Low Appraisals can occur because the home listed wasn’t actually measured…this does happen in our market. Low appraisals can occur because the listing agents failed to deduct excessive seller paid concessions when they completed that MLS CMA to price that home. And, the GBRMLS doesn’t automatically deduct excessive concessions. So, if local agents don’t do more than a simple MLS CMA to price their listings, if they don’t examine seller paid concessions on each sale they base value, they could end up with a low appraisal because that appraiser IS going to deduct excessive seller paid concessions on comps used based on Fannie Mae selling guidelines, which instructs appraisers to do so below:

“Lenders are reminded that excessive sales concessions can artificially inflate the sales price of a property, which can then lead to an inflated market value. Particular attention should be given to unusual sales or financing concessions to ensure that they are properly accounted for in the appraisal report. Fannie Mae’s definition of market value is intended to ensure that appraisals reflect an opinion of market value after adjustments for any special or creative financing or sales
concessions have been made, such as interest rate buydowns or payment of condo or homeowners’ association fees.”

Fannie Mae and FHA know that when there’s no skin-in-the-game or down payment, there could be a higher default rate!

GREATER BATON ROUGE HOME BUYERS SHOULD GET A PRE-PURCHASE HOME APPRAISAL! With the local housing market still correcting and “some” overpriced listings in this market, it’s this appraisers advice to get a Pre-Purchase Home Appraisal before negotiations!

Tags: Appraisers in Baton Rouge, Baton Rouge Homes, Baton Rouge Housing, Baton Rouge Housing Market, Baton Rouge Real Estate, Baton Rouge Real Estate Agents, Baton Rouge Real Estate Housing, Baton Rouge Real Estate Minute, Baton Rouge Real Estate Trends, Baton Rouge Realtor, Baton Rouge Realtors, Comite Hills, Central LA, 70818

Solds In The Lakes At Saint Amant Subdivision from 1/1/2010 to 12/31/2010 revealed:

Average Sales Price: $206,181 ($213,317 in 2009 or -3.35%)
Avg Sold $ Per Sq. Ft.: $96.36/sf ($102.41/sf in 2009 -5.9%)
Median Sold Price: $203,900 ($215,950 in 2009 -5.6%)
Number of “MLS” Sales: 9 (6 in 2009)
Average Number of Days On Market: 150 (101 in 2009)
Low To High: $191,000 to $229,900
Number of Sold REO/Foreclosures Noted In MLS: 1 Short Sale
Current # Listings: 2, 1 Is A Foreclosure
Current Listings Prices: $149,000 to $235,000 or $75/sf to $98/sf.

NOTE: Based on information from the Greater Baton Rouge Association of REALTORS®\MLS for the period of January 1, 2009 to December 31, 2010. This information was extracted on 1/3/2011. Yes, this appraiser has obtained permission from GBRAR MLS to use the above pricing chart!

Home On Ronda Avenue

Solds In Ronda Place Subdivision from 1/2010 to 12/31/2010 revealed:

Average Sales Price: $157,950 ($144,967 in 2009)
Average Sold Price Per Sq. Ft.: $96.79/sf ($89.87/sf in 2009)
Median Sold Price: $157,950 ($149,900 in 2009)
Number of “MLS” Sales: 2 (3 in 2009)
Average Number of Days On Market: 37 (233 in 2009)
Low To High: $156,000 to $159,900
Number of Sold REO/Foreclosures Noted In MLS: 0
Current # Listings: 2, 1 Is A Foreclosure $116,900
Current Listings Prices: $116,900 to $199,900 or $75/sf to $81/sf.

The $116,900 listing on Aimee Drive has 1,566sf living area. The $199,900 lisitng is “contingent” or under contract with the buyer’s home waiting to sell and has 2,472sf living area.

LEGAL NEWS REPORTS 4 SALES. For Ronda Place Subdivision, Legal News reports four (4) total sales, two (2) FSBO Sales. Legal News reports that 17254 Eric Dr sold for $165,000 in February 2010. MLS history reports this home has 1,616sf 6/3/2 built in 1982 with a large 25×22 Workshop. So, this home sold for $102.10/sf.

Legal News also reports a sale of one of the smaller garden homes fronting Hwy 929 for $121,500 in November 2010, Lot 67-B. MLS History states this home to be 17230 La Hwy 929 having 1,200sf with 2 bedrooms, 1 bathroom and last sold for $99,900 in 12/2005. So, this home sold for $101.25/sf approximately. I use the word “approximately” because MLS uses the even “1200″ sf, meaning that the home might not even have been measured for the listing, which is a disturbing trend I’m seeing more of in Greater Baton Rouge Real Estate.

This is the Foreclosure Listing on Aimee Drive!

NOTE: Based on information from the Greater Baton Rouge Association of REALTORS®\MLS for the period of January 1, 2010 to December 31, 2010. This information was extracted on 1/1/2011. YES, this appraiser does have the permission of GBRMLS to use the chart above Subdivision Price Trends Report!

Tags: Baton Rouge Estate Appraisers, Baton Rouge FHA Appraisers, Baton Rouge Housing Market, Baton Rouge Real Estate, Baton Rouge Real Estate Housing, Baton Rouge Real Estate Trends,

I’m appraising a home on Wilmot Street, around 1,200sf, 2 bedroom, 1 bathroom. The Fannie Mae 1004MC or Market Conditions report has the appraiser examine the “Sub-Market” or those comps that are actually comparable to the subject property instead of the entire 70805 market. So, this chart below are solds since 6/2008 and current listings from $35,000 up to $90,000 for 1,000sf to 1,400sf homes.

Right off, the first trend we see is that the sales over the past year have declined from 21 7-12 months ago, 7 4-6 months ago and now only 3 sales in the past 3 months. So, sales have almost come to a halt. Absorption rate has declined from 3.5 to 1. Active Listings have increased from 21 to 37, increase of 76%. So, there is a documented oversupply. In fact, for this appraisal, there are 37 competing listings and only 31 competing sales in the past year, more listings than solds in the past 12 months. Months of Competing Housing Supply has increased from 6 to 37 months, an increase of 517%. The median comparable sales price has declinced from $59,000 to $45,000 to $39,500. The median comparable sales days on the market has increased from 83 to 173, an increase of 108%. WITH ALL OF THIS BAD NEWS AND DOCUMENTED NEGATIVE TRENDS, THE AGENTS HAVE DECIDED TO IGNORE THESE TRENDS AND LIST THE OVERSUPPLY OF LISTINGS IN THE $69,900 RANGE! SO, WHEN THESE OVERPRICED LISTINGS ARE UNDER CONTRACT, WILL THE APPRAISERS BE BLAMED FOR “LOW BALL APPRAISALS” BECAUSE THESE HOMES DON’T APPRAISE? FOOD FOR THOUGHT!

NOTE: Based on information from the Greater Baton Rouge Association of REALTORS®\MLS for the period of June 1, 2008 to December 17, 2010. This information was extracted on 12/17/2010.

I recently completed a home appraisal assignment on Summer Drive in Merrydale Subdivision on an average 1,000sf home, in really nice condition, for this subdivision and noticed these observations. Actually, I’m reporting on ALL of the subdivisions in the Merrydale area state that “Merrydale” in this subdivision name. There appears to be some decline due to REO or foreclosure activity.

Solds In The Merrydale Subdivisions from 1/1/2010 to 12/16/2010 revealed:

Average Sales Price: $65,733 ($63,500 in 2009)
Average Sold Price Per Sq. Ft.: $54/sf ($61/sf in 2009)
Median Sold Price: $63,500 ($87,450 in 2009)
Number of Sales: 6 (14 in 2009)
Average Number of Days On Market: 76 (52 in 2009)
Low To High: $26,900 to $103,500
Number of Sold REO/Foreclosures Noted In MLS: 3
Current # Listings: 4, 0 Are Foreclosures
Current Listings Prices: $69,900 To $115,500

The 6 sales in 2010 versus the 14 in 2009 reflect the current stalling of this market post Federal Tax Credit Expiration. Without the tax credit, there doesn’t appear to be as much incentive to purchase a home. This slowdown in homes sales in a trend throughout the Baton Rouge housing market in latter 2010.

NOTE: Based on information from the Greater Baton Rouge Association of REALTORS®\MLS for the period of January 1, 2009 to December 16, 2010. This information was extracted on 12/16/2010.

Tags: Baton Rouge Appraisers, Baton Rouge Housing, Baton Rouge Real Estate, Baton Rouge Real Estate Housing, Baton Rouge Real Estate Trends, Baton Rouge, Appraisers in Baton Rouge, Merrydale, 70812

I recently completed a home appraisal assignment on Minden Street in Stevendale Heights on a larger than average 1,300sf home for this subdivision and noticed these observations. According to Legal News history, Stevendale Heights appears to experience a higher than average foreclosure or REO history. Just on Minden Street, there are currently 2 REOs or foreclosues in process, 2745 and 2766 Minden Street. And, 2739 Minden Street sold as an REO in May 2010. In fact, ALL 3 sales in 2010 were either REO or distressed in nature.

Solds In Stevendale Heights from 1/2010 to 12/17/2010 revealed:

Average Sales Price: $46,149 ($73,470 in 2009)
Average Sold Price Per Sq. Ft.: $38/sf ($53/sf in 2009)
Median Sold Price: $48,500 ($70,000 in 2009)
Number of Sales: 3 (10 in 2009)
Average Number of Days On Market: 129
Low To High: $30,000 to $59,948
Number of Sold REO/Foreclosures Noted In MLS: 3
Current # Listings: 7, 2 Are Foreclosures
Current Listings Prices: $52,000 To $87,000

NOTE: Based on information from the Greater Baton Rouge Association of REALTORS®\MLS for the period of January 1, 2009 to December 17, 2010. This information was extracted on 12/17/2010. YES, this appraiser does have the permission of GBRMLS to use the chart above Subdivision Price Trends Report!

Tags: Baton Rouge Appraisers, Baton Rouge Housing, Baton Rouge Housing Market, Baton Rouge Real Estate, Baton Rouge Real Estate Buzz, Baton Rouge Real Estate Housing, Baton Rouge Real Estate Trends, Stevendale Heights

Solds In Wimbledon Estates from 1/2010 to 10/08/2010 revealed:
Average Sales Price: $208,750 ($215,500 in 2009)
Average Sold Price Per Sq. Ft.: $95/sf ($99/sf in 2009)
Median Sold Price: $198,250 ($220,000 in 2009)
Number of Sales: 4
Average Number of Days On Market: 65
Low To High: $173,500 to $265,000
Number of Sold REO/Foreclosures Noted In MLS: 1
Current # Listings: 2, 0 Are Foreclosures
Current Listings Prices: $259,900 To $298,999

Data was used with the permission of the GBRAR MLS from search dates 1/1/2005 to 10/07/2010, extracted on 10/7/2010.

Tags: baton rouge, baton rouge real estate, real estate baton rouge, riverbend subdivision, lsu, baton rouge homes, baton rouge houses, baton rouge appraisers, baton rouge fha appraisers, accurate valuations group, baton rouge home appraisal, baton rouge home appraisals, baton rouge mls area 52

http://www.batonrougerealestateappraisal.com/

What happens when banks want to save money by assigning real estate agents the task of both “valuing” foreclosures and short sales and then selling those properties for the bank? It easily opens the door for “flopping” to occur. What is “Flopping”? According to Ann O’Rourke’s weekly Appraisal Today email update, here’s an example:

“Sergio Natera and Anna McElaney, two Connecticut real estate agents, are scheduled to be sentenced in Hartford’s federal court in August after pleading guilty to fraud. Their crime involved persuading lenders to approve the sale of homes for less than the balance owed –known as a short sale — without disclosing that there were better offers. They then flipped the houses for a profit.”

I remember doing REO appraisals in the late 1990s and getting pressure from real estate agents to low-ball so they could sell the home easier. At least they used appraisers then.”

Why do I bring this up? Because it’s in the Bloomberg News under “Banks Face Short-Sale Fraud As Home Flopping Rises” and because of what appeared in the Appraisal Today email last week from Appraiser, Richard Hagar, SRA – Fight Against BPO’s.

Richard recommends appraisers go to Google and search the term “How to influence a broker price opinion”.

Then Richard recommends, “Now take the results and show it to everybody you know, within the government or a bank, especially the people who think broker price opinions are OK for valuing property for a bank loan, short-sale or foreclosure.”

I remember listening a Real Estate Investing course in the early 2000′s from a Florida short sale expert, Jeff Kaller, who taught us how to meet the agent at the home in the attempt to get a low ball BPO. Mr. Kaller states, “The B.P.O. is the single most important part of the short sale process. In our business we have learned how critical it is that we “influence” the BPO.” Source: http://www.uslandco.com/articles/kallerspeedupshortsale.html

So, don’t be shocked if you read more and more about real estate agent flopping fraud taking place nationwide. Am I saying it’s taking place in Baton Rouge? One can’t be sure until it surfaces. But we have had one recent incident involving a real estate agent and fraud in Wilderness At White Oak (L. Mitchell per The Advocate.com). Again, this involved 1 local agent, which is the exception, not the rule. There are approximately 2,700 other local law-abiding agents operating in our market and the Wilderness was the first reported case in recent memory.

Why This Matters Now? Are their crooked appraisers as well out there? Absolutely! It seems we read about them each month nationally. The difference now is that banks rely much more heavily on BPO’s and have placed real estate agents in this situation – kind of like placing the fox in the hen house and saying you be a good boy or girl while in here. Agents not only “value” the bank’s short-sales and REO’s, but also market and help dispose of them by receiving purchase agreements. Who is out there to insure that all purchase agreements get forwarded on to the banks? And, it doesn’t appear that we learned much of anything from the mortgage meltdown. The less hands-on the valuation (just order that BPO), the more room for error and loss. The lenders have learned that they can operate in whatever manner they choose (ordering BPO’s) and when the situation turns sour, they’ll receive a U.S. Tax Payer funded bailout and be back in business next month.

It’s almost the halfway mark into 2010, June. So far into 2010, what were the lowest and highest home sales prices? In South Point in 2010, there have been 19 sales from $120,200 up to $198,500.

LOWEST HOME SALES PRICE IN SOUTH POINT IN 2010

The lowest sales price was at 23938 Teakwood Dr, a home I inspected for an REO or Foreclosure Appraisal. This home sold 2/19/2010 for $120,200 or $81.77/sf. It has 1,470sf living area with 3 bedrooms and 2.5 bathrooms.

HIGHEST HOME SALES PRICE IN SOUTH POINT IN 2010

The highest sales price was at 23750 Rosemont Dr. This home sold 5/28/2010 for $198,500 or $81.42/sf, the price reported in MLS (see corrected price below). It has 2,438sf living area with 4 bedrooms, 3 bathrooms and an expensive “Gunite” swimming pool. NOTE: The seller paid $6,000 in concessions or had to pay the buyer $6,000 to buy their home from them. Because the seller received $6,000 less at the closing table than $198,500, the actual sales price that an appraiser will use is $198,500 minus $6,000 for $192,500 or $78.96/sf. The GBRAR MLS reports gross sales price without correctly and automatically deducting seller paid concessions. However, appraisers do deduct seller paid concessions and now FHA is very wisely implementing new rules to strictly limit seller paid concessions on their deals.

]]> http://www.batonrougerealestateappraisal.com/2010/06/denham-springs-south-point-subdivision-least-and-most-expensive-home-sales-in-2010/feed/ 1 http://www.batonrougerealestateappraisal.com/2010/05/when-will-east-baton-rouge-parish-government-use-eminment-domain-and-demolish-gardere-lane-multi-family/ http://www.batonrougerealestateappraisal.com/2010/05/when-will-east-baton-rouge-parish-government-use-eminment-domain-and-demolish-gardere-lane-multi-family/#comments Tue, 18 May 2010 12:30:37 +0000 Baton Rouge Real Estate Appraisal http://www.batonrougerealestateappraisal.com/baton-rouge-real-estate-appraisal/when-will-east-baton-rouge-parish-government-use-eminment-domain-and-demolish-gardere-lane-multi-family/ http://www.batonrougerealestateappraisal.com/ – Baton Rouge Real Estate Photos From The Field: When Will EBRP Use “Eminment Domain” And Demolish The “Blight” Called Gardere Lane Multi-Family?

This is the section of Gardere Lane I’m describing, see map above. View the photos below in the slideshow. This section of Gardere Ln has been in this condition for close to 2 decades now. I call it “The War Zone”! Multiple units have the doors kicked in and are vandalized. It would seem that the residents of EBRP have been paying extra just to pay the EBRP Sheriff’s Office for their increased patrolling of this immediate area. This very immediate area, within the map drawn boundaries, is plaqued with crime (just check WAFB.com for verification). The photos below don’t even come close to showing all of the vacant and vandalized units in this immediate section. It’s years past time for the leadership of EBRP to have taken action and demolished this area to begin anew.

AND, by the way, I’m not a “Big Government” believer either.   But think about it!   Who’s on the tab for paying for this fraud (as described below)?   The US Tax Payer is!   That’s you and me!  How long are we going to allow the investors and crooked appraisers to keep sending us the bill for their “activities”?

Recent History. In the mid 2000′s, some local investors (and their repesentatives) courted the California money investors, which bought into multi-family (Duplexes and Fourplexes). A California investor would need to spend 2 to 3 times as much in California to receive the same ROI in a “stable” rental market. Many units were sold to naive California investors, some at exorbitant prices. Post Hurricane Katrina only made this situation so much worse – the fraud aspect! While there were at least 16 local immediate MLS solds of 4 plexes in the $105,000 to $147,000 range, appraisers (some from out-of-town) were brought in to appraise these for fraud purchases of $165K up to $250K and at the same time ignoring the conditions of these units. Instead of using the numerous MLS solds as comps, these appraisers used the “private” investor sales which were so exorbitant and fraudulent. Or, the appraisers went all the way over to the Staring Ln @ Perkins Rd for better comps. Some of the photos below are of a 4 plex that wasn’t worth any more than perhaps $130K, but fraudulently appraised at over $240K. One can see from the Blue Tarp that the roof was not in even acceptable condition at the time of appraisal.

The chemical explosion, see below, last week took me by surprise! I’ve driven down this road many times over the years as it’s a major north-south traffic artery. What we’re finding out 1 week after the explosion is that approximately 95% of locals had no clue that there was even a hazardous chemicals “Plant” in operation off this road, especially those that lived within 1 mile. Obviously, this was not just a chemical storage warehouse.

The article above about population is somewhat mis-stated. It states that there are more than 100 people living within 1/2 mile of the explosion. That’s kind of like saying more than 100 people live in Denham Springs. There are far many more than that living within 1/2 mile. There are 2 major residential subdivisions witin 1/8 mile of this warehouse. The residents of Carlton Oaks weren’t allowed back into their homes for 3 days after the explosion and now wonder have their home values plummeted over night. As I write this, almost one week after the explosion, some of the residents of the large manufactured housing development directly adjacent to the warehouse still have not been able to return to their homes.

Many locals are asking what happened last week and what idiots in the local and municipal governments approved the occupancy permits of a hazardous chemical plant in the middle of a residential neighborhood? The company name itself, Coco’s Resources Warehouse, doesn’t clearly explain that this was a hazardous materials “plant”, not just a storage warehouse.

North Park, a large 100 acre public recreational facility located within 1/2 mile, is presumed to have had 100s of kids and families there during the Easter holidays week off from school as the blast occurred shortly after 2pm. There are so many unanswered questions….and now a lawsuit. It’s my hope that the lawsuit not only targets the company who owned the warehouse but also those local and Parish governments that approved such a hazardous use in this residential neighborhood. They truly bear the majority of the blame was for this explosion.

In this video, Realtor and Broker, Tony Zito, delivers the Denham Springs housing market update from 1/1/2010 through 4/2/2010.

I ran across a situation in the Greater Baton Rouge Housing Market where a homeowner, located in a subdivision where the average home is worth $150,000, installed a $60,000 Gunite Inground Pool recently. Now, their home is on the market and they are about to be taken through the “school of hard knocks” when the appraiser doesn’t give them any more than $5,000 to maybe $7,500 contributory value for their pool. I’ve been appraising now for 18 years and see these types of situation several times per year and just shake my head when I see this happen.

Why only $5,000 to $7,500 contributory value for a $60,000 “gunite” pool? It’s not that “blankety blank” appraiser’s fault. It’s actually the market, the buyers, that don’t reward such expensive overimprovements. And mortgage underwriters that scrutinize the appraisals when appraisers do.

Is It Common For IG Pools In That Market? Let’s venture this thought process in the eyes of the appraiser! You have to look at the overall market and ask if it’s common for $60,000 inground pools to be installed in subdivisions where the homes are $150,000, which it’s not. Then ask yourself if the average owner in Such-And-Such Subdivision has an inground pool and the answer is no. Look at an aerial map for proof. Is it common for any buyer in the general Greater Baton Rouge market to pay more than $7,500 for a pool on an existing home sale where the price of the home is below $200,000? That answer is generally no as well. There may be exceptions, but they would be very rare.

Mortgage Underwriting Questions? What happens if the appraiser gives more than $5,000 to $7,500 on a pool is the underwriters coming back with a request for comps where the market actually gave that much for a pool. It’s at that point where the sale may fall apart because the appraiser can’t support giving the subject home that much value for that $60K pool in a $150,000 subdivision. I’m sure from the photos that it’s a nice pool, but in this national mortgage meltdown market where this loan may be underwritten in New Jersey, Manhatten NY or California or elsewhere where pools don’t carry much value, then giving too much value to the pool may even cause the lender not to want to do the loan and/or throw up red-flags.

There’s two lessons here!

1.) If you plan on remaining in your home until you die, then live it up and build whatever you want in your backyard (ig pools, metal workshop, that covered patio, wood decking, stone walk-ways, etc..).

2.) If you don’t plan on remaining in your home until you die, and your investment dollars must be wisely spent, then be very cautious about installing ig pools, metal workshops, covered patios, wood decks, stone walk-ways, etc.. because they don’t bring much return on investment. The lesson here is not to invest money in the your backyard and expect to receive dollar-for-dollar return on your investment. The lesson is to invest on the home itself before investing in your backyard.

Greater Baton Rouge’s Home Appraiser – Bill Cobb! Your Local Home Value “Trust Agent”! http://www.accuratevg.com/

]]> http://www.batonrougerealestateappraisal.com/2010/02/greater-baton-rouge-homeowner-should-not-have-added-60000-pool-in-a-150000-subdivision/feed/ 2 http://www.batonrougerealestateappraisal.com/2010/02/gonzales-louisiana-fha-appraisers-ascension-fastest-growing-parish-in-state/ http://www.batonrougerealestateappraisal.com/2010/02/gonzales-louisiana-fha-appraisers-ascension-fastest-growing-parish-in-state/#comments Wed, 03 Feb 2010 08:54:12 +0000 Baton Rouge Real Estate Appraisal http://www.batonrougerealestateappraisal.com/greater-baton-rouge-subdivision-video-tours/gonzales-louisiana-fha-appraisers-ascension-fastest-growing-parish-in-state/ http://www.ascensionrealestateappraisers.com/ – Gonzales Louisiana FHA Appraisers: Ascension Fastest Growing Parish In State of Louisiana

The Ascension Weekly Citizen Online is reporting Ascension Parish is the fastest growing Parish in the State of Louisiana. Their article is posted here and here’s a snippet from their article:

“Ascension is the fastest growing parish in the state, according to estimates from the Louisiana Tech University College of Business.
Ascension Parish grew at a rate of 36.17 percent from the year 2000 to 2009, gaining 27,961 people, the Tech study said.

Louisiana on the whole grew just .52 during that time period.

Neighboring Livingston, another fast growing parish, grew by 33.74, and picked up 30,976 new residents.

“It’s not a surprise,” Ascension President Tommy Martinez said Friday. He said growth in Ascension is actually slowing down a bit at present, which is good because it will allow the parish to put a parishwide master plan into place and prepare for the next wave of growth.”

Housing Market Direction For Cobblestone Parc: Up or Down?

Solds In Cobblestone Parc from 1/2008 to 12/2008 revealed:
Average Sales Price: $255,870
Average Sold Price Per Sq. Ft.: $113.41/sf
Median Sold Price: $245,000
Average Days On Market: 117
Number Of Sales: 5

Solds In Cobblestone Parc from 1/2009 to 12/2009 revealed:
Average Sales Price: $224,475
Average Sold Price Per Sq. Ft.: $105.30/sf
Median Sold Price: $226,500
Average Days On Market: 70
Number Of Sales: 4

Therefore, based on the “median sale price barometer” within Cobblestone Parc, the barometer used by the National Association of Realtors, the market direction declined from 2008 to 2009. The 2008 median sales price declined from $245,000 down to $226,500 in 2009 or -7.55%. However, the from peak in 2008 pricing in 11/2008 at $266,500, the median sales price has declined by -20%. However, this is only based on 4 total sales in 2009 and there are so many different sizes and floor plans of homes in Cobblestone Parc that I doubt the true decline has been as much as -20%.

One of the sales in 2009 was an REO that only sold for $95/sf, which attributed to some of the decline. The 4 2009 Solds went for $95/sf, $103/sf, $106/sf and $117/sf. So, it appears support of the later three sales is $109/sf.

The irony of this situation now in 2010 is that there are 3 current listings for $113/sf, $124/sf and $137/sf, the latter 2 listed far above 2009 market support when the market was in decline. Remember we stated above at 2009 support was $109/sf. Perhaps these homes have extras or upgrades to warrant listing prices that are $15/sf to $28/sf above 2009 support. Not Sure! Buyers: Do Your Homework Here and make sure you don’t pay more than market support!

Bill Cobb, Appraiser – Your Local Greater Baton Rouge Housing “Trust Agent”!

For Your Greater Baton Rouge Home Apprasial Needs, Give Accurate Valuations Group A Call at 225-293-1500

http://www.accuratevg.com/

Housing Market Direction: Up or Down For Homes In The 1250sf to 1600sf, Ages 4-15 Yrs Old, Area 90?

Therefore, based on the “median sale price barometer” charting above, the barometer used by the National Association of Realtors, the market direction declined from January 2009 to January 2010 by -5.23% based on 143 sales analyzed (REOs included). Search parameters were: 1/1/08 to Present, 1250sf to 1600sf, Ages 4-15 years old, MLS Area 90. 143 Sales Results Were Analyzed. Data used with the permission of the GBRAR (Greater Baton Rouge Association Of Realtors).

REO / Foreclosure Rate: Based on MLS Data of the actual solds, the REO rate is a low 4%. However, It’s also stated here that a 2009 article (The Landmines Within by Michael Tarabotto
http://activerain.com/blogsview/930436/The-Landmines-Within ) stated that as much as 70% of REOs never make it into the MLS. MLS is reporting 2 comparable REO listings. However, since it’s possible that 70% of REOs and/or Sheriff Sales never make it into the MLS System, it’s almost impossible to know exactly how many competing REOs there really are out there.

For Your Home Appraisal Needs In Greater Baton Rouge, Give Bill Cobb A Call At 225-293-1500 or www.accuratevg.com.

Housing Market Direction: Up or Down?

Solds In Shenandoah Estates from 1/2007 to 12/2007 revealed:
Average Sales Price: $193,628
Average Sold Price Per Sq. Ft.: $93.62/sf
Median Sold Price: $190,000
Average Days On Market: 81
Number Of Sales: 91

Solds In Shenandoah Estates from 1/2008 to 12/2008 revealed:
Average Sales Price: $200,524
Average Sold Price Per Sq. Ft.: $89.68/sf
Median Sold Price: $205,000
Average Days On Market: 89
Number Of Sales: 68

Solds In Shenandoah Estates from 1/2009 to 12/2009 revealed:
Average Sales Price: $196,030
Average Sold Price Per Sq. Ft.: $89.48/sf
Median Sold Price: $196,500
Average Days On Market: 106
Number Of Sales: 62

Therefore, based on the “median sale price barometer” within Shenandoah Estates, the barometer used by the National Association of Realtors, the market direction increased from 2007 to 2008 but declined from 2008 into 2009. However, the 2009 median sales price at $196,500 is still higher than the 2007 $190,000. The gap between the high and low median sales prices was $15,000. The Aveage Sold Price Per Sq. Ft. only varied $4.14/sf within this 3 year period, which shows a fairly tight, supportive market.

For Your Greater Baton Rouge Home Apprasial Needs, Give Accurate Valuations Group A Call at 225-293-1500 or visit

Housing Market Direction: Up or Down?

Solds In Shenandoah Estates from 1/2007 to 12/2007 revealed:
Average Sales Price: $193,628
Average Sold Price Per Sq. Ft.: $93.62/sf
Median Sold Price: $190,000
Average Days On Market: 81
Number Of Sales: 91

Solds In Shenandoah Estates from 1/2008 to 12/2008 revealed:
Average Sales Price: $200,524
Average Sold Price Per Sq. Ft.: $89.68/sf
Median Sold Price: $205,000
Average Days On Market: 89
Number Of Sales: 68

Solds In Shenandoah Estates from 1/2009 to 12/2009 revealed:
Average Sales Price: $196,030
Average Sold Price Per Sq. Ft.: $89.48/sf
Median Sold Price: $196,500
Average Days On Market: 106
Number Of Sales: 62

Therefore, based on the “median sale price barometer” within Shenandoah Estates, the barometer used by the National Association of Realtors, the market direction increased from 2007 to 2008 but declined from 2008 into 2009. However, the 2009 median sales price at $196,500 is still higher than the 2007 $190,000. The gap between the high and low median sales prices was $15,000. The Aveage Sold Price Per Sq. Ft. only varied $4.14/sf within this 3 year period, which shows a fairly tight, supportive market.

For Your Greater Baton Rouge Home Apprasial Needs, Give Accurate Valuations Group A Call at 225-293-1500 or visit http://www.accuratevg.com/

Snow On 12/5/09, The Earliest Recorded Snow On Record In Louisiana

A Good Sign: New Construction Now Taking Place in The Walker Market Now By Vicknair Builders. The Builders Have Had To Lower Their Pricing To Much More Realistic Levels To Sell Homes In This Now Move To A More Affordable Market!

A Good Sign: New Construction Now Taking Place in The Walker Market Now By Vicknair Builders. The Builders Have Had To Lower Their Pricing To Much More Realistic Levels To Sell Homes In This Now Move To A More Affordable Market!

A Good Sign: New Construction Now Taking Place in The Walker Market Now By Vicknair Builders. The Builders Have Had To Lower Their Pricing To Much More Realistic Levels To Sell Homes In This Now Move To A More Affordable Market!

A Vacant and Unfinished Home Sits In Autumn Run Subdivision – An Object Lesson In Why One Shouldn’t Overbuild In A Subdivision Where The Average Home Is 1,500sf to 1,600sf. This Home In The Photo Is Estimated To Be 2,000sf to 2,200sf, Overbuilt By Approximately 35%.

http://www.ascensionrealestateappraisers.com/

A market analysis of solds from 8/1/2008 to 11/23/2009 within Old Mill Subdivision shows an overall median sales price decline of -3.58% on what appears to be low volume. However, the Listing Price To Sales Price Ratio still remains high or favorable at 100% of listing price. The chart below represents solds from 1/1/2007 to 11/23/2009.

1004MC of Old Mill Itself

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