Renovation ROI - A Smart Option

Inside the Data

It's no secret the residential real estate market has "cooled" this past year. Some would say it's experiencing a deep freeze. As national sales trends show a continued downward trend in median market pricing, the press has had a field day with the numbers. The problem with these reports is the data itself. In order to have an increase in median pricing, a broad price range of property transactions need to be sampled. As we all know, the number of sales consummated in the Tampa Bay area are down when compared to last years stats, hence median price is probably the least relevant statistic, considering the myriad of micro markets existing in our market. However, we're not focusing on the doom and gloom in this report.

Market Realities

Experience has taught us when homes are priced within the range of current market expectations, sales ensue. With inventories of single family homes and condominiums at record highs, competition between selling parties heats up. But this "battle royale" doesn't have to get down and dirty. In fact, certain renovation projects can put your property at the front of the buyer's line. Supporting data exists to show the Tampa Bay MSA (Metropolitan Statistical Area) outperforms the Southeast region and the nation in average return on investment (ROI) for both residential upgrades and more involved renovation projects.

Local vs. Regional vs. National Trend

At las palmas appraisal, we believe the following data will be of benefit to you when determining the viability of "tweaking up" a property prior to listing/selling. This information applies to midrange and upscale projects.

Our friends at Hanley Wood, LLC provide the regional vs. national data here. Click on Download City Data to view the local Tampa MSA information. We think you'll find this information extremely interesting and quite surprising.
As your resource for quality valuation services, it's our intention to keep you professionally informed with helpful, pertinent information. Hopefully, we've kept our promise with this market report.
Thank you for your time and your support.

Regards,

John Huston
State Certified REA RD-6006

Recipe for Mortgage Mess

As appraisers, we sometimes get caught up in the minutiae of our profession without taking some time to step back and look at the big picture. What I mean by this is simple. Without the supporting documentation provided within our appraisal reports, a mortgage will not be consummated. No loans would be processed.

However, when the mortgagor does acquire a property, based upon our valuations, it is their responsibility to pay according to their agreement. During the sub-prime heyday, many people did just that. However, when their balloon burst, and they couldn't pay, the result was a serious hit to the financial markets (as perceived by the media).

The attached article written by Helen Huntley of the St. Pete Times http://www.sptimes.com/2007/09/06/Business/Recipe_for_a_mortgage.shtml does a great job of reducing this whole process into bite size chunks, so we can understand what happens when these faulty loans form the base of many asset backed securities. It is a sober reminder of the importance of the service (or in some cases disservice) we provide our clients.

John Huston
Florida St. Cert. REA RD-6006

Mortgage Fraud and Preditory Lending

As the Congress prepares to return from "Summer Vacation", the scuttlebutt from the Hill is centered around the the financial market's unrest due to the current sub-prime meltdown. The Senate has yet to act on any of the House measures which had been forwarded to them prior to their departure. Hence, any legislative action focused on helping those borrowers whose decisions were not quite financially responsible, is many months off.

As appraisers, we are responsible for unbiased valuation opinions for many of these transactions. It is interesting to read the Appraisal Institute's talking points for the 2007 legislative session. You can peruse them @: http://www.appraisalinstitute.org/govtaffairs/downloads/tlkng_pnts_fnl.pdf

The "Actions Requested" section is especially informative.

John Huston
Florida St. Cert. REA RD-6006

FHA Lending on the Rise

Recently, I've noticed an uptick in FHA appraisal business. It seemed that with the sub-prime market churning along, FHA lending was backburnered by many loan reps. I've recently come across a great article by Peter Miller, which supports my intuition. Here's the link: http://www.fhaloanpros.com/2007/08/fha-activity-soars-in-first-half-of-august/



I trust this will be of interest to you as well.