Zachary Louisiana Real Estate News

http://www.batonrougerealestateappraisal.com/ - Win A New Copy Of Gary Vaynerchucks Crush It by Baton Rouge FHA Home Appraisers.

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Drawing Is March 15, 2010!

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http://www.batonrougerealestateappraisal.com/win-a-new-copy-of-crush-it-contest/

http://www.batonrougerealestateappraisal.com/ - Baton Rouge Real Estate: Greater Baton Rouge Homeowner Should Not Have Added $60,000 Pool In A $150,000 Subdivision

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/ - Baton Rouge Real Estate: Four Demographic Trends That Will Affect Greater Baton Rouge Housing

Realtor.org and and The Urban Land Institute are reporting on 4 demographic trends that will affect Greater Baton Rouge Housing! Their short article is located here and is quoted below.

“4 Demographic Trends That Will Affect Housing

A new report from the Urban Land Institute predicts two major changes in the U.S. housing market as we began a new decade.

Home appreciation will slow considerably to about 1 percent to 2 percent annually.

The current U.S. homeownership rate, now at 67 percent (which is down from a record high of 69 percent), will fall further to about 62 percent.

4 Major Demographic Trends

The report also cites four major U.S. demographic trends that will have a major impact on housing.

1. Aging baby boomers (ages 55 to 64 years old): They will keep working, and many will be forced to stay in their suburban homes until values recover. Those who are able to move will choose mixed-age living environments that cater to active lifestyles. Walkable suburban town centers also will appeal to this group.

2. Younger baby boomers (46 to 54 years old): They are now entering their prime earning years but they will lack home equity and unlike the older members of their generation, they won’t be able to purchase second homes. This will likely curb the prospects for the second-home market.

3. Generation Y: They are larger than the baby boom generation (with a population of about 86 million). As they enter the housing market, they are less interested in homeownership than their parents were when they were young adults. “They will be renters by necessity or choice for years ahead,” says John K. McIlwain, author of the report.

4. Immigrants – both legal and illegal: They are nearly 40 million strong. They often prefer multi-generational households and if they can afford them, larger homes in neighborhoods with a strong sense of community.

Source: The Urban Land Institute (01/27/2010)

Tags: Baton Rouge Estate Appraisers, baton rouge real estate, greater baton rouge real estate, baton rouge real estate trends

http://www.batonrougerealestateappraisal.com/ - Recommended Reading For Baton Rouge Mortgage Lenders and Realtors On “Low Appraisals”. Article counters ‘Appraier Hit Pieces’ In Media: Patrick Egger “Closing The Gap Between Sales Price And Appraised Value” Article.

From Washington Appraiser, Dave Towne:

“Appraisers……

Over the past couple of months, ‘negative press’ hit pieces have been circulating in major media and blogs about how ‘appraisers have caused a disruption in property sales’, erroneously attributed to the HVCC, since the economy went into the tank in 2008 and early 2009.

The attached 4 page PDF is an article written by Patrick Egger, Cert. Gen’l appraiser and appraiser educator from Las Vegas, which discusses why competent appraisers make decisions ‘we’ do regarding establishing an opinion of market value. I have met Patrick, and have taken a class from him.

Patrick has given me permission to distribute this article, and has told me you may distribute it to anyone you choose. Your mortgage lenders and real estate sales people buddies might like to see this so that they get a better understanding of what you do in analyzing market area sales used in your reports.

Be sure to save the PDF, and print it for your own review.

Dave Towne, Appraiser Education Service“

NOTE: To Download Patrick Egger’s Article, Click Here!

http://www.appraisersinbatonrouge.com/ - Greater Baton Rouge Chinese Drywall Victims To Be Eligible for Federal Assistance

The Louisiana Realtor’s eNews Digest is reporting that some Greater Baton Rouge FHA Insured residents may be eligible for Chinese Drywall Federal Assistance.

“The U.S. Department of Housing and Urban Development recently announced that FHA-insured families experiencing problems associated with problem drywall may be eligible for assistance to help them rehabilitate their properties. In addition, HUD’s Community Development Block Grant (CDBG) Program may also be a resource to help the Louisiana Recovery Authority and local communities combat the problem.

“We’re instructing our FHA mortgage lenders nationwide to extend temporary relief to allow these families time to remove problem damaging drywall and repair their homes,” said FHA Commissioner David Stevens. “We want to remove additional pressures for these families as they find solutions to allow them to return to a safe, decent and sanitary home.”

The Louisiana Recovery Authority set aside $5 million to help Road Home applicants with problem drywall. Because U.S. manufacturers were unable to handle the drywall demand in the aftermath of the 2005 hurricane season, many homes built or repaired afterwards were constructed with Chinese-manufactured wallboard that emits sulfuric gases that many people believe are making them sick and are corroding metal fixtures and appliances in homes.

Federal funds cannot be disbursed until the government establishes drywall testing and remediation procedures. Those decisions are expected to be made early this year. HUD’s announcement also means that the Recovery Authority could make funds available to non-Road Home applicants with drywall problems.

To date the Recovery Authority has registered nearly 600 people with problem drywall in their homes, and is continuing to collect more names. To register, homeowners should visit atlra.louisiana.gov/drywallform and complete their online form or call the state’s contaminated drywall hotline at 1.866.684.1713.”

• Related Times-Picayune article • HUD’s announcement regarding federal assistance