Appreciation stagnates in many marketsTHE NATION'S HOUSING
By KENNETH R. HARNEY <br/>WASHINGTON POST WRITERS GROUP
WASHINGTON -- What is real estate worth in a market with a glut of homes for sale, and where re-listings with price reductions are becoming routine? That's the question facing buyers from Southern California to Arizona, to Florida and north to New England, all of which are experiencing declines in appreciation rates and sagging sales.
The answer often comes from someone they may not see, much less know by name: The appraiser hired by the lender.
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For sellers, appraisers' opinions of property value in softening markets can be pails of ice water: Sorry, but your house is worth $100,000 less today than it was last summer or spring.
For buyers, the professional valuations can be deal-killers when the sales contract price is significantly higher than the appraisal, and the lender demands a bigger down payment.
Looking ahead to 2006, veteran appraisers around the country have advice for buyers and sellers.
Tops on the list: Know the home's market sub-segment -- its general price band or locational niche. Frank Gregoire, vice chairman of the Florida Real Estate Appraisal Board and an active appraiser in the St. Petersburg-Tampa area, said a cyclical slowdown is well under way in the middle- and upper-price brackets of the Florida west coast, but not in the lower-cost level segments of $250,000 and below.
Tom Berge, head of an appraisal firm in Orange County, Calif., said that although many sellers are apparently unaware of it, there is currently "just about zero inflation" in many segments of the residential real estate market, with the exception of the low end.
"If people can show me (true) comps that I missed, I will adjust" the appraised value. That "doesn't happen all that often," he adds.
Chris Call of AREAS Appraisers Inc. of Springfield, Va., has this three-word piece of wisdom for sellers and buyers in softening markets: "Just be realistic."
