Arizona’s Softening Real Estate Market

  Several things have occurred during the last 45 – 60 days in the real estate market of Arizona, requiring appraisers’ attention when making adjustments.

  During the last several years, the residential real estate market has experienced rapid rising home values driven by high demand, a lack of active listings, and low-interest rates. New home sales have been beyond brisk, and buyers have experienced significant equity increases even before move-in. Many homes have sold within several days and, in some cases, the day of listing.

 The market is changing. The Federal Reserve Bank has raised rates several times this year and is forecasted to increase rates several more times before the end of the year. Some forecasters have suggested rates will rise as much as one percent (100 bases points). Rate increases have caused what could be called normalization in the real estate market. Normalization in that prices are starting to decline to a more affordable level, homes are staying on the market longer, and sellers, including new home builders, have restarted offering closing incentives. Some list-to-sell ratios are below 100%.

Advice

 Is it time to reassess how we treat time adjustments and suggest exposure times? Over the past year, time adjustments could be determined, with some comfort, by measuring prices over the past three or six months. One percent, two and one-half percent per month in some markets could be supported, and days on the market at five to fifteen.

  Beware; a chart may show a significant increase in values while, in reality, there might be a dip at the most recent dates showing a decline or flatting in median home values. If adjusting, consider all the comparative data, including data reflective of the most recent period. Also, you might want to add comments reflecting short-term market conditions, further supporting your conclusions. Remember, we are recorders of history, not forecasters of the future.

Greetings to all Appraisers,

As we share the cheer and joy of the Holiday Season, we at CoAA look warmly back on 2017 and its membership. Over the past year, we have been steadfast in our collective efforts to improve the atmosphere, across all landscapes, within our Profession. As in past years, we have made strides to initiate Legislative Action regarding protections for Appraisers against frivolous lawsuits and sought to clarify language of the Regulatory authority, amidst opposition. We are preparing to continue this pursuit with earnest in 2018, in conjunction with our internal and external Lobbyist, Legal Counsel, other AZ groups and State Representative from the Appraisal Institute. CoAA has been aligned with National and State organizations and Similar coalitions to successfully elevate the voice of our membership on a National level. It is by the “boots on the ground” effort that positive changes are being made. It is not by any small feat, that progress and change evolve from a big voice.

In 2017, CoAA monthly meetings were attended in impressive numbers, by Active appraisers with 1 year to 50 years of experience, Lenders, Realtors, AMCs and those considering entering the Profession.  The meetings and gatherings were created to cover a host of topics of interest to our membership. Together, we broke bread at various venues across the Valley highlighting topics such as “Covering Your Appraisal” in which our membership offered the group a view into working knowledge and examples of how Quality reports, should be developed. We also took the time to review, dissect and understand the latest versions of industry contracts and purchase agreements. During the summer we heard from State and Federal employees regarding issues surrounding Superfund Sites and how our reports could be impacted. In our ever-evolving industry; we took time to share methods for increasing efficiencies and report credibility. The benefit from these meetings, as expressed by the membership,was invaluable.

The Government Relations Committee for the 2018 calendar is currently taking shape to, once again, bringing our voice to the Legislative table. We are confident that collectively our objectivity and persistence will prevail. CoAA’s Education Committee is devising its curriculum(s) for multiple CE offerings. CoAA's commitment and advocacy to the new generation of appraisers is moving to the forefront in 2018, with the assembly of our proposed guidance and review committee. In the end, committee involvement is at the heart of CoAA, with our Volunteers playing a significant role as we work together to fulfill our mission and goals.

When appraisers like you and I think of the CoAA, you get the understanding that it’s more than just another association, it’s a cause.  CoAA is an organization that, thanks to your support, continues to strengthen the community of appraisers consisting of your peers in AZ and across the country.

We hope that if you’re not a member, you consider becoming a member https://www.azcoaa.us/join-us.

Be a part of what’s great about this profession and join your voice with fellow Arizona Appraisers.

Seasons Greetings, Blessings and Gratitude,

Joseph Weidinger

2017-2018 President