Sacramento Appraisal Blog

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A whiff of new construction in Sacramento County

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Have you been seeing more new construction in Sacramento lately? I’ve come across new projects in Arden-Arcade, Elk Grove, Anatolia, Pocket/Greenhaven, Kavala Ranch and Sacramento on Bradshaw Road among others. There has been an uptick in building permits over the past quarter, but there is still historically a lower number of permits in 2011 compared to the past two years. What stands out to you below? Do you think permits in 2011 will end up similar to 2010 levels?

Below is a graph to show the greater context of permit history in Sacramento County since 1994. As you can see, the level of permits over these past few years is a drop in the bucket compared to the last 15 years. Permits figures cannot get too much lower than they have been lately, right? What do you see?

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

Spoof definitions and lending on rural properties

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What is a rural property and why does it matter for lending purposes? Let’s look at how Fannie Mae defines a rural property, but first let’s take a pitstop through three spoof definitions that are commonplace among appraisers. At least a couple of these came from the REAA online appraiser’s forum. Do you have any definitions to add? What issues have you experienced with rural loans?

Rural – If you pee outside and nobody sees you
Suburan – If you pee outside and your neighbors call the police
Urban – If you pee outside and nobody cares

Rural – Green Acres, Lassie
Suburban – Leave it to Beaver, Desperate Housewives
Urban – Seinfeld, Ally McBeal

Pizza Definition: If they deliver pizza it’s urban or suburban. If they don’t deliver pizza, it’s rural.

Fannie Mae and most lenders view definitions of rural, suburban and urban as follows.

Urban – relates to a city
Suburban – relates to an area adjacent to a city
Rural – relates to the country or beyond the suburban area

Why does this matter whether a property is rural or suburban/urban? Sacramento area loan specialist Beth Gewerth says: “Basically, we just need to make sure the house has value. We don’t want to see a 900 sq ft home on 10 acres, as we don’t do land loans. Anything over 10 acres can be an issue and we need to look at it case by case. Also, we run into a lot of unpermitted buildings with rural properties and not all lenders will approve. We sell directly to Fannie Mae and they will allow this.” Contact Beth at 916-926-8124 or 916-730-2499 with further questions.
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What do appraisal reports look like now after September 2011?

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I’ve been getting questions about the new changes to appraisal reports since the UAD came into effect last week on September 1, 2011. If you’re wondering what UAD reports look like, click on the thumbnail image below. You’ll notice many new abbreviations, and if you’re not familiar with some of them, you may wonder what is going on. What is “C3” or “Q4” or “s05/11jc05/11” or “ArmLth”?

What do you think? Easy to understand? Confusing?

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

Is it fishy when the appraised value comes in at the sales price?

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Does it seem a bit suspect when the appraised value comes in at the sales price? Maybe you’ve felt that way before. Should you be concerned? Yes and no.

Yes. If the appraiser has deliberately met the sales price in an attempt to make the deal work, it is suspect and you should be concerned. If the house is really worth more or less, it’s not fair to have the appraisal hastily completed to help make a transaction move forward.

No. The sales price can be a good indication of market value. The agreement between a buyer and seller can very well reflect market value for a property and fall within the range of values in a neighborhood. If the buyer and seller (and others) offered on the property and all came in at a similar level close to the contract price, chances are that might be a pretty decent indication of how the market sees the property. For example, if the sales price was $225,000 and the range of values for competitive sales looks to be $220,000 to $230,000, and there is no good reason for the subject value to be reconciled at the higher or lower end of the range, then $225,000 could very well be a rational selection for market value. It is very reasonable for the appraiser to make such a conclusion and not suspect at all so long as there is support for that conclusion. In short, when the appraised value equals the sales price, the appraiser might just be saying, “Yep, that looks good based on all data. The buyer and seller did a good job working out a price.”

What do you think?

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

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