As 2013 unfolds, it’ll be interesting to see where this year heads in terms of real estate. Everyone and their Mom has predictions and strong beliefs of course, but we’ll see how things pan out. One of the groups I do think we should continue to watch closely this year though is Blackstone (THR California). Since entering the market very strongly last August, they set themselves apart as the most aggressive hedge fund buyer in the Sacramento area (so far), which makes it important to see how their strategy plays out.
Icebergs & Prices: The market under $200,000 has been a prime target for investors, so this graph is no surprise. In fact, the price focus of THR California / Blackstone so far reminds me of an iceberg. Just as the vast bulk of an iceberg is under the water, with only a smaller portion above water, 81% of the purchases by Blackstone have been under the $200,000 level, with only 19% above that mark. I know iceberg purists are going to tell me icebergs are usually estimated at about 85-90% below water, but hey, it’s similar enough to get the point here, right?
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NOTE: The graph above is based only on information provided from Tax Records / Realist. As of 01/22/2013 there were 465 sales in the name of “THR California” since August 1, 2012. Blackstone is not new to the market of course since they do own almost 900 properties in the Sacramento area that they’ve purchased through the years, but the rampant purchasing over the past two quarters has really increased their local holdings. Some sources indicate they have purchased far more than 465 sales over the past months, though I am only going by what I see in Tax Records. If someone else has another source, speak on.
Questions: What do you think is going to happen to the market under $200,000 this year? What dynamics are you seeing play out during every day real estate transactions?
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Today I want to share 10 subtle (or not so subtle) statements that in a small way can come across as trying to influence an appraiser’s value. These statements are very normative in the real estate industry, aren’t they?
My advice? It’s probably best to use language that cannot be interpreted as pressuring for a certain value – whether high or low. If you find yourself using subtle statements like this, ask yourself what you are really trying to get across to the appraiser. How could you do that without pressure statements? Honestly, it likely feels tricky sometimes to be able to communicate with appraisers these days in light of HVCC and Frank-Dodd, but with some focus and strategy, there are definitely ways to chat and convey good information to appraisers – without trying to steer a certain value. If you’re looking to communicate more effectively with appraisers, check out 
Here’s my two cents. After inspecting thousands of homes, it does become quite easy to quickly assess the amenities in a home – particularly if the appraiser is familiar with the neighborhood or even the particular house model. Some houses can be very quick to measure in light of their rectangular shape, while other homes are very complex and the appraiser might be there for a number of hours measuring the house and collecting details. I’m not sure if this appraiser was thorough or not, but it is bad form to not measure one side of the house when it was completely accessible to the appraiser. Additionally, it’s a bit skimpy to not open the shower door to at least see what is there. After all, it’s telling what you can find sometimes when looking in a shower (or under the kitchen or bathroom sinks). Ultimately, it’s still possible the appraiser caught mostly everything, so there may be nothing to worry about, though it sounds like the appraiser went a bit too fast and missed some things. Hopefully that won’t have a negative impact on the value. Even if the value is accurate though, it’s too bad my non-neurotic friend questioned the appraiser’s end-product because of how fast the appraisal inspection was. There just might be a business lesson here for those who enter homes for a living.
Advice to home owners: Had my friend called me before the inspection I would have given him the following advice. Make a written list of all upgrades you have done since you purchased your home several years ago. Give this list to the appraiser and make yourself available for any questions. Expect that the appraiser may be very quick and may even be less personable than you’d like too. Focus on what you can control, which is welcoming the appraiser into your home, providing written details about your house and giving the appraiser space to do his job. For more advice, read