“The cities expected to report the largest increase in the median price of a previously owned single-family homes are Memphis, Tampa, Jacksonville, Milwaukee and St. Louis.”
CMG Comment: Best quote I’ve seen so far on the Flood Insurance rate increases: “To be clear, if Biggert-Waters 2012 goes forward unabated, hundreds of thousands, and perhaps millions, of Americans who have played by the rules, built where the government told them, maintained insurance, and never flooded – will lose everything.”
CMG Comment: We are all for quality control and adding professionalism to the appraisal industry, and just hope that this new initiative will be fairly executed. Our only fear is that FNMA will use computer models to “scrub” data from submitted appraisal reports and will identify appraisals which include items that the computer models sees as “errors” without actually READING the reports and analyzing the specific items in them. Appraisal reports are often complicated products, and require specific discussion and explanation in order to be complete and accurate – and must be fully read to be understood. That is a problem with the current trend towards computerized valuation, specific data fields in reports (ie. the new UAD formats from FNMA), and reliance on form field data. Currently, there are new requirements for very specialized formats to be used to complete Fannie Mae compliant appraisal reports, which allow automated computerized review of check boxes and data fields in reports, but DO NOT allow for variations that exist in a large majority of homes appraised, and the computers are not able to “read” addendums or comments made by the appraisers which explain these items specific to the home being appraised. As a result, more and more appraisers are relying on these restrictive “click this box” form fields to complete their appraisals of homes, instead of writing more information which is directed at the individual home they are appraising. In our opinion, this leads to a less accurate and professional report. And with this increased demand for this type of report compliance, there is a potential to punish the appraisers (like US) who take additional time and care to provide more detailed information – which the computers then ignore – and reward those appraisers who take the short cut approach.
Local, state and federal lawmakers looking for solutions
CMG Comments: Continued discussion on revising the Biggert-Waters Act, which has dramatically affected flood insurance rates. Hopefully, some common sense measures from our legislators will be made to correct this issue which is greatly affecting 1,000′s of local residents, their home’s values, and their ability to sell their homes.
This measure (Biggert-Waters) does NOT just affect wealthy waterfront home owner’s in high priced “McMansions”, but many, many moderate priced homes which have had FEMA backed flood insurance for decades under one set of rules, and now the rules have changed. Many people (ie. elderly home owners on fixed incomes) are facing being forced out of the homes they have lived in for years due to flood insurance premiums rising $1,000′s per year.
We are continuing to follow the latest on this issue, and it’s affect on home values in our area.