tag:blogger.com,1999:blog-112591872024-03-13T11:37:33.876-05:00Chip ShotsOfficial blog of Chip Wagner, SRA, ASA, IFA, SCRP, president of A.L. Wagner Appraisal Group.Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.comBlogger30125tag:blogger.com,1999:blog-11259187.post-89304899201995001472020-11-26T23:32:00.000-06:002020-11-26T23:32:24.612-06:00Chicago Inventory in the 3rd Quarter of 2020 – The Year of Covid19<p> </p><p align="center" class="MsoNormal" style="text-align: center;"><b><u><span style="font-size: 14.0pt; mso-bidi-font-size: 11.0pt;">INVENTORY IN 2020 – THE YEAR
OF COVID19<o:p></o:p></span></u></b></p>
<p class="MsoNormal">We are now a little bit beyond 6 months since the onset of
the COVID19 Global Pandemic and everybody has an opinion on where real estate
markets are heading. There have been
many articles and opinions on the impact on the housing market, and the
short-term trends are now shaping a long-term perspective. </p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p>S</o:p>ome trends are obvious.
During the 2020 pandemic, America’s workforce has learned how to get the
job done remotely and some may never return to an office environment like they
used to. But it has been a struggle to find additional space to work at home,
not to mention school-aged children attempting to participate in distance
learning. Multiple family members trying
to get work and schoolwork done in the same domicile is shaping the way we look
at our future housing needs. Small spaces area out, will the demand for
McMansions return? One thing for certain
is homes with multiple office spaces are in demand.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">Those who live in high-density housing are searching for
more spacious properties to distance themselves from their neighbors. This
includes those in apartments moving to entry level housing; and those in higher
density condominiums (especially high rises and elevator buildings) into larger
townhomes and detached homes. </p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">The newfound ability to work at home, combined with a
presidential election, protests and urban unrest, some homeowners are seeking
quieter exurban destinations. <i>(For
those wondering what an “exurb” is, it is an area outside the typically denser
inner suburban area of a metropolitan area, which has an economic and commuting
connection to the metro area, with low housing density and low growth.)</i></p>
<p class="MsoNormal">While I do not have a strong opinion, I can share my
fact-based observations. The facts are
the raw statistics that are observed at the end of our third quarter of 2020.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">The first graph shows the Chicagoland data, this includes
all detached homes in our region in the Multiple Listing Service. It shows a significant drop from the 3<sup>rd</sup>
quarter of 2019 to the 3<sup>rd</sup> quarter of 2020, a -48.5% drop. This drop in supply may be a result of two
factors – one, fewer people marketing their home during the pandemic and
secondly, these homes are currently under contract late into the typical
selling season (traditionally the Spring market).</p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7e1KZI5xDJH87F4J-2bhDz-2XoErmJvHW1RDLq3o68a9JTQTkj1lF7_tk8vhIbYqMpowyDTnxF8-d-6XfKvSqWhCb0Wl6Ql89UftnrPvYd7pXKolB9iQK27YH46LW2wMbMoQM/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="362" data-original-width="623" height="186" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7e1KZI5xDJH87F4J-2bhDz-2XoErmJvHW1RDLq3o68a9JTQTkj1lF7_tk8vhIbYqMpowyDTnxF8-d-6XfKvSqWhCb0Wl6Ql89UftnrPvYd7pXKolB9iQK27YH46LW2wMbMoQM/" width="320" /></a></div><br /><br /><p></p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">The next graph specifically shows attached housing within
the City of Chicago. Attached housing
includes condominiums, PUD/Townhomes, Co-Ops and Duplex residences in the
Multiple Listing Service.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><span style="mso-spacerun: yes;"> </span>This data shows a significant increase from the 3<sup>rd</sup>
quarter of 2019 to the 3<sup>rd</sup> quarter of 2020, a +36.2% increase. This increase supports the fact that people
are trying to sell their high-density homes.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEighauFpK-TL0VXqr7Ty5RdsV_ysign4h16jZjjaPW5vITR2LunzpfOPcVOTBsEq7ciKEmYVAfDjFFhpHCnRgCiVIWoRrfMHCtlkQKGtmO_-7XRRIlzYP43s5OkV_eF_qePA8Xo/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="370" data-original-width="622" height="190" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEighauFpK-TL0VXqr7Ty5RdsV_ysign4h16jZjjaPW5vITR2LunzpfOPcVOTBsEq7ciKEmYVAfDjFFhpHCnRgCiVIWoRrfMHCtlkQKGtmO_-7XRRIlzYP43s5OkV_eF_qePA8Xo/" width="320" /></a></div><br /><p class="MsoNormal">The next graph shows Chicagoland data for the Months Supply
of Inventory, which is the relationship between the number of active listings
currently on the market against those properties that have gone under contract
and sold in the past year. This graph shows the detached homes in our region in
the Multiple Listing Service.<span style="mso-spacerun: yes;"> </span>It shows a
significant drop from the 3<sup>rd</sup> quarter of 2019 to the 3<sup>rd</sup>
quarter of 2020, a -53.1% drop.<span style="mso-spacerun: yes;"> </span><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhWWtftAzKziT5tG4b8umnc3qQ-aePziIDb2iVC0_oZyHy-Uj4fy8Dn2XWLtKCTJZHOo4L0bKuTYf9BIa6gABfEoURL3AzWQQOS4NiLYiq8kgZZE67a2VztvKNIyNFmewM-2lEh/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="344" data-original-width="634" height="174" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhWWtftAzKziT5tG4b8umnc3qQ-aePziIDb2iVC0_oZyHy-Uj4fy8Dn2XWLtKCTJZHOo4L0bKuTYf9BIa6gABfEoURL3AzWQQOS4NiLYiq8kgZZE67a2VztvKNIyNFmewM-2lEh/" width="320" /></a></div><br /><p></p>
<p class="MsoNormal">The final graph shows attached housing in the City of
Chicago, and a +41.5% increase in inventory.</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh_ilTQVG70k7BP-izqPaJk0eoablZJyr2a8DJjAZyzw2g_II8T2m1OPz2f1pK1b0D20kGG90yMVLsOuGnBp6QQRAty3J_S5rKbOrW5dboCrhEg_JvIgf4iWcq07DYV3RF0mrVX/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="342" data-original-width="630" height="174" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh_ilTQVG70k7BP-izqPaJk0eoablZJyr2a8DJjAZyzw2g_II8T2m1OPz2f1pK1b0D20kGG90yMVLsOuGnBp6QQRAty3J_S5rKbOrW5dboCrhEg_JvIgf4iWcq07DYV3RF0mrVX/" width="320" /></a></div><div class="separator" style="clear: both; text-align: center;"><span style="text-align: left;"><br /></span></div><div class="separator" style="clear: both; text-align: center;"><span style="text-align: left;">To summarize, there appears to be a direct relationship to
housing types in the Chicago Marketplace.</span><span style="text-align: left;">
</span><span style="text-align: left;">The detached housing throughout northeastern Illinois is extremely
undersupplied, showing record lows for available listings leading to extremely
undersupplied inventory levels. The attached housing market in the City of
Chicago is showing significantly increasing supply of listings.</span></div><p></p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p><o:p> </o:p><o:p> </o:p> </p>
<p class="MsoNormal"><b><i><span style="font-size: 11.0pt; mso-bidi-font-size: 9.0pt;">A.L.
Wagner Appraisal Group</span></i></b><i><span style="font-size: 11.0pt; mso-bidi-font-size: 9.0pt;"> is a Chicago-area real estate appraisal and
consulting firm established in 1970. The firm specializes in residential real
estate valuation, relocation appraisals, residential consulting and market
studies serving a diverse base of clients including lenders, law firms,
government agencies, corporations, relocation companies and other professionals
for over 50 years.<span style="mso-spacerun: yes;"> </span>Third generation
appraiser Chip Wagner leads the company and has been appraising since 1986.<span style="mso-spacerun: yes;"> </span>Chip has earned the SRA designation from the Appraisal
Institute, the ASA designation from the American Society of Appraisers, the
SCRP designation from Worldwide ERC® and is a member of the Relocation
Appraisers and Consultants.<span style="mso-spacerun: yes;"> </span>Chip is
frequently quoted in the press, has authored many articles for national magazines,
is a contributing author to the Worldwide ERC® Summary Appraisal Report and the
Relocation Appraisal Guide, and is frequent instructor for many organizations.<o:p></o:p></span></i></p><p class="MsoNormal"><i><span style="font-size: 11.0pt; mso-bidi-font-size: 9.0pt;">Contact Chip at Chip@WagnerAppraisal.com or 630/416-6556.</span></i></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 9.0pt; mso-bidi-font-size: 10.0pt;"><o:p> </o:p></span></b></p>Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com0tag:blogger.com,1999:blog-11259187.post-56802894786984072882013-06-05T11:06:00.000-05:002013-06-05T11:06:07.050-05:00First ImpressionsI am often asked by homeowners getting ready to put their home on the market, "What can I do to help sell my home?"<br />
<br />
Preparing for the real estate appraiser can be intimidating, whether your motive is refinancing, or to help facilitate the sales process. Appraisers are trained to overlook the personal property inside a home, but a well-kept and clean home at the time of the appraisal inspection will give the impression to the appraiser that the home has been well cared for.<br />
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<a href="http://www.blogger.com/" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"></a><a href="http://www.blogger.com/" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"></a><a href="http://www.blogger.com/" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"></a><a href="http://www.blogger.com/" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"></a><a href="http://www.blogger.com/" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"></a>Just like the importance of the real estate mantra “Location, Location, Location” – I like to advise homeowners the importance of staging the home and its first impression, or its “appearance.” An appraiser acts as a “surrogate buyer” – trying to anticipate how the majority of the buyers will act and react to a property and its features.<br />
<br />
The “appearance” includes the first impressions a buyer will have and can be broken down into three steps. These include: <br />
<br />
• the first impression from the curb;<br />
• the impression outside at the front door;<br />
• the impression when you step inside the front door.<br />
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How does the home look from the street when they drive up? A well-manicured, clutter-free yard is imperative. This is called curb appeal. Cars should be garaged or removed from the site.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYuZ63squChZkAEzcfPv46oeQMFDLl24XAM1x_mxVoXTo4ELV84td2p-aJswasdESEL7aaBQ31BzeMTj4xoGWTGAE9HT4VU-zjbp4EF6t3O6u1TvFHp3JfahG88bLnSXF0W_SD/s1600/DSCN8062.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYuZ63squChZkAEzcfPv46oeQMFDLl24XAM1x_mxVoXTo4ELV84td2p-aJswasdESEL7aaBQ31BzeMTj4xoGWTGAE9HT4VU-zjbp4EF6t3O6u1TvFHp3JfahG88bLnSXF0W_SD/s200/DSCN8062.JPG" width="200" /></a><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjh_-skpJicKCIXq246V1D9_7AAIPEUX4R3p0wBGXIyQuzXeywEBonNz02NemeQgUZrljPdEUzBX752T0bmWPnYINBKo3Bhvnaj78GqOyYOblHSqiHgFiuDOZaOHgxVBQ4ijtt2/s1600/DSCN8105.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjh_-skpJicKCIXq246V1D9_7AAIPEUX4R3p0wBGXIyQuzXeywEBonNz02NemeQgUZrljPdEUzBX752T0bmWPnYINBKo3Bhvnaj78GqOyYOblHSqiHgFiuDOZaOHgxVBQ4ijtt2/s200/DSCN8105.JPG" width="200" /></a></div>
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Next, what are the impressions when walking up to the front door? Make sure the trim around the garage door, windows and front door is clean or freshly painted. The front landscaping should be free of weeds or debris, with fresh mulch. Make sure there are no sinking or severely cracked walks. If there is a screen/storm door, it should function correctly and be very clean. Freshly sealcoat that asphalt driveway.<br />
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Finally, what is the first impression inside the front door? What do you see and smell? Does the entrance to the home have personalized decorating, or is it generally neutral as you welcome somebody into your home? Neutral decorating is most important in the first floor within view from the front door.<br />
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Regardless of the type of housing, the price range, or your community, these factors are very important. If there are known issues, they may be overcome with a little work or expense.<br />
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Every home has imperfections, some, only the home inspectors will find, others will be very obvious to the appraiser and potential buyers. If you have positive initial appearance and impressions when you step into the home, it is likely that a minor problem elsewhere may be overlooked. But if you have problems or issues with those first three steps, you may lose the buyer before they step into the home.<br />
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Finally, don’t be afraid to share with the appraiser information that will help them out. Things like a Plat of Survey and a list of upgrades and improvements made since they have lived in the home, are things that are very helpful to the appraiser. If a copy can be made so that they may bring them with, it is even more helpful. Perhaps a set of blueprints or a builder’s floorplan with the layout of the home is available to share with the appraiser.<br />
<br />
Appraisers often come from areas outside of the community they are appraising in. Whether the homeowner or the Realtor, sharing comparables (including sales, pendings and active listings) to support the value will give you piece of mind that the appraiser has the data necessary to complete the job. Often times, you or your Realtor may have information that goes beyond the simple MLS Listing Sheet as far as conditions of the sale, motivation of the sellers, or something in the home that caused obsolescence (negative impact).<br />
<br />
Interested in getting a professional appraisal? Visit my former blog at: <a href="http://www.chipwags.blogspot.com/2011/07/should-i-get-appraisal-on-my-home.html">http://www.chipwags.blogspot.com/2011/07/should-i-get-appraisal-on-my-home.html</a> for more details. Contact Chip Wagner at chip@wagnerappraisal.com or (630) 416-6556 for a quote. Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com5tag:blogger.com,1999:blog-11259187.post-54607221999083969892013-02-08T14:24:00.002-06:002013-02-08T14:24:54.830-06:00What’s in a View?
<br />
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<span style="font-family: Calibri;">I was recently interviewed by a reporter for the Wall Street
Journal on how an appraiser values a residential property’s view.<span style="mso-spacerun: yes;"> </span>Unfortunately, my interview did not lead to
an actual quote in the article, but the topic got me thinking… <em><strong>what’s in a
view?</strong></em></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">The “view” is typically what can be seen from the subject
property.<span style="mso-spacerun: yes;"> </span>Sometimes an appraiser may
consider the <b style="mso-bidi-font-weight: normal;">View</b> to be more than what
you can see, but also hear and smell.<span style="mso-spacerun: yes;"> </span>The
value of the view is in the eyes of the beholder.<span style="mso-spacerun: yes;"> </span>Some place more value on it than others.<span style="mso-spacerun: yes;"> </span>The appraiser tries to estimate the impact of
a view as perceived by market participants.<span style="mso-spacerun: yes;">
</span>The value of the view is not something we pull out of thin air, it is
something that is generally based on years and years of appraising hundreds or thousands
of homes.</span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgrShGGlGTYgfAtRA2JeiolbFqnVa0IapGi3_dzmbk8if9SRZwJvzQvAj43i0ihM2ALRZ0oRA7RCtHPzDY1Zh8wcutI0PE0kyNnOWzD-hna184wwamgrpsoHoY51aodY1FKMTJe/s1600/Golf+View.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgrShGGlGTYgfAtRA2JeiolbFqnVa0IapGi3_dzmbk8if9SRZwJvzQvAj43i0ihM2ALRZ0oRA7RCtHPzDY1Zh8wcutI0PE0kyNnOWzD-hna184wwamgrpsoHoY51aodY1FKMTJe/s200/Golf+View.jpg" width="200" /></a><span style="font-family: Calibri;">One starting point to measure the value of a view may be in
a new construction housing development.<span style="mso-spacerun: yes;">
</span>In a new development, a developer/builder will establish a site premium
for a view on the lots.<span style="mso-spacerun: yes;"> </span>For example, in
a Naperville golf course community, the developer originally gave a $50,000
premium for homes on the golf course over homes that backed up to other
homes.<span style="mso-spacerun: yes;"> </span>For years, that was a good
general guideline in that neighborhood on what the value of that golf course view
was worth.<span style="mso-spacerun: yes;"> </span>Sometimes the resale market
accepts that premium, rejects it, or places a greater premium on that view.<span style="mso-spacerun: yes;"> </span>And it is important to realize that $50,000
golf view adjustment does not automatically translate into other golf course
neighborhoods.</span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhu0Jp4U612-Q93ZaLVyD38MfaFnzRJ2b0Mxi05J0Mnln5Vu1nL2VV07TQXkKPcCK0OUW4XXbk-oQHaQDJ_aWSz9p0zvX3RdSQQ6ylaJQY9A9yqDw99HVshdlsZDlSdGncPrhjh/s1600/Golf+View+2.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhu0Jp4U612-Q93ZaLVyD38MfaFnzRJ2b0Mxi05J0Mnln5Vu1nL2VV07TQXkKPcCK0OUW4XXbk-oQHaQDJ_aWSz9p0zvX3RdSQQ6ylaJQY9A9yqDw99HVshdlsZDlSdGncPrhjh/s200/Golf+View+2.jpg" width="200" /></a><span style="font-family: Calibri;">The value of the view may change over the years.<span style="mso-spacerun: yes;"> </span>To some, that view of the golf course may be
perceived as a positive view – the picturesque view with no neighbors to the
rear, with perfectly manicured fairways, bunkers and maturing trees, with a
passing golfer or two ever 10 minutes on a nice day.<span style="mso-spacerun: yes;"> </span>But to others, that view could be a constant
barrage of golf balls flying into your back yard where your kids are playing,
occasionally even hitting your house and once or twice a summer, breaking one
of your windows.<span style="mso-spacerun: yes;"> </span>There are strangers
constantly walking or riding golf carts behind you, often times cussing at
their errant shots.<span style="mso-spacerun: yes;"> </span>Depending on where
on the golf course that home is situated, may influence the impact of the
view.<span style="mso-spacerun: yes;"> </span>The beauty is in the eyes of the
beholder.</span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjiMWcJ1GZ8KDpyH74OjjUiG9eAzAIJoS1zycxSiAkH5vySYg7nNeBo2fyEsyw0e8zTtqAhwpUf4nYYZMwVBSKAo5AU97mlacGDlhggmjvvjOPy0NAOn6XDzXN-2fZbtP5Q4E3p/s1600/DSCN0557.JPG" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjiMWcJ1GZ8KDpyH74OjjUiG9eAzAIJoS1zycxSiAkH5vySYg7nNeBo2fyEsyw0e8zTtqAhwpUf4nYYZMwVBSKAo5AU97mlacGDlhggmjvvjOPy0NAOn6XDzXN-2fZbtP5Q4E3p/s200/DSCN0557.JPG" width="200" /></a><span style="font-family: Calibri;">In the world of real estate appraisers, the view is
generally called External Influences – things that affect a property that is
not on the actual property itself.<span style="mso-spacerun: yes;"> </span>If it
is negative, it is called External Obsolescence which is a reduction in value
caused by an undesirable factor(s) outside of the property itself.</span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">In 2011, Fannie Mae defined the description of “View” into a
few items through its implementation of the UAD – Universal Appraisal
Dataset.<span style="mso-spacerun: yes;"> </span>It defines the fields that an
appraiser must enter for report submission for conventional loans.<span style="mso-spacerun: yes;"> </span>There are three basic categories for View on
an appraisal report – Neutral, Beneficial or Adverse.<span style="mso-spacerun: yes;"> </span></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Neutral</b> – If the
view is neutral, it is generally assumed that similar housing and/or land use
surrounding the property is the same.<span style="mso-spacerun: yes;"> </span>A
neutral view would be a “residential view” of like-properties in each direction
– to the front, rear or sides of the subject property.</span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Beneficial </b>- Parks,
forest preserve, wooded, golf course, pond, lake, ocean, hillside or mountain</span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.5in;">
<span style="font-family: Calibri;">BUT… To some, that park may have
screaming children and families on Saturday mornings playing soccer at 8 AM.</span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.5in;">
<span style="font-family: Calibri;">BUT… to some, that forest preserve
may have creatures that may prohibit the enjoyment of the family – such as
wildlife that may pose a threat to children or pets.</span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.5in;">
<span style="font-family: Calibri;">BUT… To some, that golf course view
may be that constant barrage of golf balls flying into your yard while your
kids are playing – as previously mentioned. </span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.5in;">
<span style="font-family: Calibri;">BUT… To some, that view of the pond
may pose safety issues for those with small children or pets, and health issues
such as alligators or crocodiles in Florida, or the West Nile Virus in our
region caused by mosquitoes. </span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.5in;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlS86z7ESp60btFQMZiC_PZrzMntx_S2r9t2FzjXNuLbSNASzHOqLWlt_dkXyGbqwau_mWqWem_4AHICi9CdgTmuUvoOBwr0qckZ-g_dU4HXdeKE-d6_66BsWO1aQl1m_1tusT/s1600/City+View+lake+blocked.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlS86z7ESp60btFQMZiC_PZrzMntx_S2r9t2FzjXNuLbSNASzHOqLWlt_dkXyGbqwau_mWqWem_4AHICi9CdgTmuUvoOBwr0qckZ-g_dU4HXdeKE-d6_66BsWO1aQl1m_1tusT/s200/City+View+lake+blocked.jpg" width="200" /></a><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhzi_jq7MHUt5p4wtreB8FS3wzI87Sr2sc2As-7V6vI4EM65mQmu-Nhrm7j3uoalm1MPhDNoJe3x90z_sTZNxCDHW0uWZaQ7Xq1bpoJXqy5C-4CgEcT6TXKM-EvBMI_cc-Wv5dr/s1600/No+View.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhzi_jq7MHUt5p4wtreB8FS3wzI87Sr2sc2As-7V6vI4EM65mQmu-Nhrm7j3uoalm1MPhDNoJe3x90z_sTZNxCDHW0uWZaQ7Xq1bpoJXqy5C-4CgEcT6TXKM-EvBMI_cc-Wv5dr/s200/No+View.jpg" width="200" /></a><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguzu2QikvBXErfjOFlxwxouhNihApF5KxifEM4DSQpw1xeHc1ybaN6msmiViO1h6T6BuU-R9kLxki4Ka_GSzkMwSN5xpQ_0o39m3rBwVy2eDDiiLiMct_L26aC5rsIEzTbIwGN/s1600/HiRiseChicagoView3.JPG" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguzu2QikvBXErfjOFlxwxouhNihApF5KxifEM4DSQpw1xeHc1ybaN6msmiViO1h6T6BuU-R9kLxki4Ka_GSzkMwSN5xpQ_0o39m3rBwVy2eDDiiLiMct_L26aC5rsIEzTbIwGN/s200/HiRiseChicagoView3.JPG" width="200" /></a><span style="font-family: Calibri;">How much do we give that Mountain,
Lake or Ocean view?<span style="mso-spacerun: yes;"> </span>Being from Chicago,
I don’t have the experience of the ocean or mountain views, but we have Lake
Michigan.<span style="mso-spacerun: yes;"> </span>High rise condominiums in the
City of Chicago may have a $100,000 to $250,000+ view premium viewing a clear
view of the picturesque cityscape AND Lake Michigan, versus a view in the
opposite direction. <span style="mso-spacerun: yes;"> </span>But what happens
when that new condominium high rise building goes up on the next block that
completely obstructs your serene views?<span style="mso-spacerun: yes;">
</span>Gone in a flash!<span style="mso-spacerun: yes;"> </span>With the
popularity of residential condominium development in Chicago in the past 10-15
years, this has happened to many buildings.</span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEidaq9iy5pwrPtDIYhX5OgVhD6E753txCEy_o4nWGfrv60nI5HWe0Oi1x24Vn6u-Zx7mWahNO-26TMsKucSHeUv6LyeHn07x8aYnQMynTSb5Jaibg6qyX6LHraPPDl9kJlz1aJt/s1600/IMG_2221.JPG" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEidaq9iy5pwrPtDIYhX5OgVhD6E753txCEy_o4nWGfrv60nI5HWe0Oi1x24Vn6u-Zx7mWahNO-26TMsKucSHeUv6LyeHn07x8aYnQMynTSb5Jaibg6qyX6LHraPPDl9kJlz1aJt/s200/IMG_2221.JPG" width="200" /></a><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Adverse</b> – Many
examples can be thought of, naming a few: Commercial/Retail use, House of Worship,
parking lots, Industrial use, busy streets, railroad tracks, high tension
wires, water towers, garbage dumps/landfills.</span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">But let’s be careful, again, the view is in the eyes of the
beholder. </span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.5in;">
<span style="font-family: Calibri;">Busy street in urban/city areas
perhaps with higher crime rates, there may be a sense of safety with higher
traffic versus quiet street.</span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.5in;">
<span style="font-family: Calibri;">I have done a lot of relocation
appraisals for transferring homeowners who work for the railroad – they
actually like to have the railroad tracks within view.</span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Not sure?<span style="mso-spacerun: yes;"> </span></b>Some views could be both positive to
some, Negative to others.<span style="mso-spacerun: yes;"> </span>Some examples include
busy streets, schools, and cemeteries. </span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.5in;">
<span style="font-family: Calibri;">Cemeteries are going to be nice
quiet space to some market participants, while others are turned off.</span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt 0.5in;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjM4Fzg5JX0GHGK02PFgfimYZqyqU4eub_aASVlU9XfWEeTqM7PsF7xjyNo3Ti_CcKLyauWf_Dv8idWfhcjxgzNmCFh_QUWk3qVNRFYAE8x_wOBy6mMOOWEc5RVDtwq8dqSWyhO/s1600/School+View.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjM4Fzg5JX0GHGK02PFgfimYZqyqU4eub_aASVlU9XfWEeTqM7PsF7xjyNo3Ti_CcKLyauWf_Dv8idWfhcjxgzNmCFh_QUWk3qVNRFYAE8x_wOBy6mMOOWEc5RVDtwq8dqSWyhO/s200/School+View.jpg" width="200" /></a><span style="font-family: Calibri;">A view of a school could be
negative if the building/parking lot are closer to you that may create adverse
appeal if it is constant cars and buses lining up. But to some, that view of
the school may be a positive if there is a park-like buffer between the school building.
Also, the type of school and the family profile of the buyer will impact that
proximity to the school – being able to watch your first grader walk out your
door to the school’s front door is very comforting to a parent.</span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">So, we have an idea what beneficial, adverse and neutral
factors are.<span style="mso-spacerun: yes;"> </span>Now how does the appraiser
measure the impact? The appraiser attempts to measure that view in terms of
dollars that one is willing to pay or deduct.</span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">In a perfect world, matched pairs can be identified.<span style="mso-spacerun: yes;"> </span>This means two identical properties are found
to have both recently sold, with the only differentiating factor is that one
has a different view influence (positive or negative) and the other has a
neutral view influence. In the real world, this rarely every happens, but the
theory behind this simple example is what provides the basics as to how an
appraiser applies all of his or her adjustments in an appraisal. <span style="mso-spacerun: yes;"> </span>Most often, this analysis is a judgment call
based on years of analysis of the professional appraiser.</span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Also, the magnitude of the adjustment may change as the real
estate market changes… for example, if a home was worth $600,000 five years
ago, and the view was a 5% premium, it would be $30,000.<span style="mso-spacerun: yes;"> </span>The same house declines $200,000 in the real
estate market five years later, and that view premium still may be looked at as
a 5% premium, so it is now $20,000.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>This is one way that views can change with the
market.</span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;">
<span style="font-family: Calibri;">Another way the value of the view may fluctuate may simply
be timing.<span style="mso-spacerun: yes;"> </span>The laws of Supply and Demand
may influence the magnitude of the adjustment – if there are many homes
competing with one another with the same view, that can minimize the impact of
the view; conversely, if the view is so unique and not typically available, one
may be willing to pay a higher value for that view.<span style="mso-spacerun: yes;"> </span>How much?<span style="mso-spacerun: yes;">
</span>That is in the eyes of the beholder!</span></div>
Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com0tag:blogger.com,1999:blog-11259187.post-69517207537243447472012-07-17T12:26:00.001-05:002012-07-17T12:26:40.002-05:00Video Blogging<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhEU-EYvOTpQivXHt-f3-eLdyTcUe89WhrjdkZb7iHuBOH6TOIZMM-v-fAmyo4ZRnlBwiUjBcWlgwJCzxgq3nm4mxjxXFrg2ucyk6f50YZV-k-bZERUQZfIAQcBcFxgCRc8CSV/s1600/VideoBlog.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="186" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhEU-EYvOTpQivXHt-f3-eLdyTcUe89WhrjdkZb7iHuBOH6TOIZMM-v-fAmyo4ZRnlBwiUjBcWlgwJCzxgq3nm4mxjxXFrg2ucyk6f50YZV-k-bZERUQZfIAQcBcFxgCRc8CSV/s320/VideoBlog.jpg" width="320" /></a></div>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhEU-EYvOTpQivXHt-f3-eLdyTcUe89WhrjdkZb7iHuBOH6TOIZMM-v-fAmyo4ZRnlBwiUjBcWlgwJCzxgq3nm4mxjxXFrg2ucyk6f50YZV-k-bZERUQZfIAQcBcFxgCRc8CSV/s1600/VideoBlog.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"></a><br />
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhEU-EYvOTpQivXHt-f3-eLdyTcUe89WhrjdkZb7iHuBOH6TOIZMM-v-fAmyo4ZRnlBwiUjBcWlgwJCzxgq3nm4mxjxXFrg2ucyk6f50YZV-k-bZERUQZfIAQcBcFxgCRc8CSV/s1600/VideoBlog.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><div style="text-align: left;">
</div>
</a><br />
This Spring, I was invited to sit down with <strong>John D’Ambrogio – Vice President, Stragetic Development, Baird and Warner Real Estate, Chicago </strong>and be interviewed for their Chicago Relocation Blog.<br />
<br />
John and I are longtime industry friends, having served on boards and committees in the past. The experience of being interviewed for a Video Blog was a lot of fun. We talked about the real estate appraisal profession, the Chicago residential real estate market, and many of the current issues surrouding real estate appraisals and appraisers.<br />
<br />
You may view each of the blogs in a 3 part series at:<br />
<a href="http://chicagorelocationblog.com/?p=2216">http://chicagorelocationblog.com/?p=2216</a><br />
<a href="http://chicagorelocationblog.com/?p=2231">http://chicagorelocationblog.com/?p=2231</a><br />
<a href="http://chicagorelocationblog.com/?p=2235">http://chicagorelocationblog.com/?p=2235</a>Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com0tag:blogger.com,1999:blog-11259187.post-87655956711943376812011-09-09T20:27:00.000-05:002011-09-09T20:27:04.784-05:005 Questions with Chip Wagner for Valuation Review Magazine<span style="font-family: "Times New Roman","serif"; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><img height="54" src="file:///C:/Users/Chip/AppData/Local/Temp/msohtmlclip1/01/clip_image002.gif" v:shapes="_x0000_i1025" width="320" /></span><br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;">Give us an overview of your background. How did you get your start in the appraisal industry? What positions have you held? What is your current status? <o:p></o:p></b></div><br />
Chip Wagner:<span style="mso-spacerun: yes;"> </span>I am a third generation real estate appraiser, literally born into the industry.<span style="mso-spacerun: yes;"> </span>I worked for my father in grammar school earning money to purchase comic books and baseball cards.<span style="mso-spacerun: yes;"> </span>In those days, I was a jack of all trades - emptying waste baskets, copying reports, filing appraisals, transferring comparables from active to pending to closed categories in our office’s “pre-computer” system, going on appraisal inspections with my father and holding the dumb-end of the tape measure.<span style="mso-spacerun: yes;"> </span>My favorite was assisting appraisers by drawing floor plans and plot plans on graph paper.<span style="mso-spacerun: yes;"> </span>Eventually I was given the challenge to write appraisals, and long before licensing, I wrote my first appraisal on an old Green Hornet form before I had a driver’s license.<span style="mso-spacerun: yes;"> </span>Real estate appraising was my summer job throughout high school and college.<br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">Following graduation from Bradley University in 1990, I joined my father’s real estate appraisal firm and took it over in 2000 when he retired. <span style="mso-spacerun: yes;"> </span>My grand uncle Percy Wagner, MAI, was the national president of the former American Institute of Real Estate Appraisers in 1960.<span style="mso-spacerun: yes;"> </span>My father Alvin Wagner Jr., SRA, RM was one of the pioneers in corporate relocation appraising.<span style="mso-spacerun: yes;"> </span>Both my father and grand uncle were always proactively involved in the appraisal industry and encouraged me to get involved.</div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 0pt;">I earned the SRA designation from the Appraisal Institute as well as the Worldwide ERC’s SCRP designation (Senior Certified Relocation Professional). <span style="mso-spacerun: yes;"> </span>I am one of 11 appraisers in the nation who has earned the SCRP designation.<span style="mso-spacerun: yes;"> </span>In 2011, I was inducted into the Worldwide ERC’s distinguished “Hall of Leaders.”<span style="mso-spacerun: yes;"> </span>I have served as president of the Relocation Appraisers and Consultants (2004) and president of the Chicagoland Corporate Relocation Council (2001).<span style="mso-spacerun: yes;"> </span></div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="mso-spacerun: yes;"></span>Since 2006 I have served as the Worldwide ERC representative to The Appraisal Foundation Advisory Council (TAFAC) and currently serve as the 2011 President of the Chicago Chapter of the Appraisal Institute.</div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 0pt;">A. L. Wagner Appraisal Group is a residential fee appraisal business with a primary emphasis on corporate relocation appraisals servicing the <st1:city w:st="on"><st1:place w:st="on">Chicago</st1:place></st1:city> metropolitan area.<span style="mso-spacerun: yes;"> </span>I was one of the authors of the newly revised Worldwide ERC Summary Appraisal Report form, and developed a 7-hour continuing education seminar on Relocation Appraising which I taught throughout the <st1:place w:st="on">Midwest</st1:place> and the Northeast during 2011.</div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;">Given everything the appraisal industry has gone through where do see the profession five to ten years from now? What will be the major changes? What will stay the same? </b></div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 0pt;">Chip Wagner:<span style="mso-spacerun: yes;"> </span>Since I started in this profession, I have always strived to be the best that I could be, and have been proactively involved in the industry.<span style="mso-spacerun: yes;"> </span>I had long believed that there would be a contraction of appraisers, with the best left standing after the dust settled.<span style="mso-spacerun: yes;"> </span>I was right about the contraction, but the best have been leaving the business either through attrition, or unable to compete with the changes that have taken place.<span style="mso-spacerun: yes;"> </span>Factors beyond our control have driven many good people out of business, and those same factors are preventing new appraisers to be attracted to the appraisal industry.</div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 0pt;">Diversification has been the “buzz word” for many years for the residential appraiser.<span style="mso-spacerun: yes;"> </span>Those who have diversified away from lending work are surviving today.</div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 0pt;">The bottom line is real estate continues to be a significant investment for individuals, partnerships and corporations.<span style="mso-spacerun: yes;"> </span>The appraiser is the only unbiased party that does not have a vested interest in the transfer of property or the value of the property.</div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 0pt;">Understanding how the professional appraiser will fit into the process in five or ten years from now is not clear.<span style="mso-spacerun: yes;"> </span>Continued government intervention and their unintended consequences are reshaping the way we do business.<span style="mso-spacerun: yes;"> </span>Those who are technologically savvy and are analysts (not form-fillers) will survive and thrive.<span style="mso-spacerun: yes;"> </span></div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="mso-spacerun: yes;"></span><b style="mso-bidi-font-weight: normal;">What is your biggest appraisal-related challenge today? What are you doing to overcome it?</b></div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 0pt;">Chip Wagner:<span style="mso-spacerun: yes;"> </span>For me, the greatest challenge I am facing today is the nuances in the marketplace.<span style="mso-spacerun: yes;"> </span>It is more difficult than ever understanding what has happened, why it happened, and what the future trends might and/or will be.<span style="mso-spacerun: yes;"> </span>The local markets have seen unprecedented declines in value and increases in inventory.<span style="mso-spacerun: yes;"> </span>The distressed market competition has flooded many areas of the country, and their presence has lead to serious problems in many sub-markets across the country.<span style="mso-spacerun: yes;"> </span>The discussion of the shadow inventory and its impact has yet to be seen.</div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 0pt;">To do my job correctly, my appraisals are taking significantly longer. <span style="mso-spacerun: yes;"> </span>I spend an hour (or longer) per assignment, just in market analysis and comparable selection for confirmation of the data.<span style="mso-spacerun: yes;"> </span>Understanding the terms of the sale on the comparables is critical.</div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 0pt;">Risk is obviously greater to our clients and users of appraisal services.<span style="mso-spacerun: yes;"> </span>They are viewing our work with a microscope, leading to additional time on the back-end of the assignment, providing further clarification and sometimes even defending our work.</div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;">What has been your most unique appraisal experience? Whether it’s an experience at a property, a bizarre appraisal request or technology snafu that got you in a jam – anything that’s outside the norm.</b></div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 0pt;">Chip Wagner: I’ve appraised many unique residential properties, met unique people, and have had unique problems throughout my career.<span style="mso-spacerun: yes;"> </span>It has gotten to the point after thousands and thousands of properties inspected that there are few surprises.<span style="mso-spacerun: yes;"> </span>Historic properties, celebrity properties, and notorious properties are always a challenge yet enjoyable to do.<span style="mso-spacerun: yes;"> </span>The ones that stand out are usually the ones where I learned something new.<span style="mso-spacerun: yes;"> </span>But my greatest experiences as a practicing real estate appraiser are when I am instructing to fellow appraisers or clients, as I truly enjoy sharing my knowledge with others.</div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;">What advice would you give to future appraisers? </b></div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 0pt;">Chip Wagner:<span style="mso-spacerun: yes;"> </span>I believe that it is more important than ever to be associated with a professional association to help you stay abreast of the rapid change our industry faces.<span style="mso-spacerun: yes;"> </span>There are several credible ones, find the one most active in their area, one that fits their ideals and then get involved.<span style="mso-spacerun: yes;"> </span>The appraisers that I have seen that are the most “lost” are the ones who have not invested in their future through education, diversification, and networking with peers.<span style="mso-spacerun: yes;"> </span>Being an active member with a professional association is a good start.<span style="mso-spacerun: yes;"> </span></div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="mso-spacerun: yes;"></span>As a profession, Real Estate Appraisers must keep an open mind, be aware of the changes, and seek opportunities.<span style="mso-spacerun: yes;"> </span>Embrace change, don’t fight it.<span style="mso-spacerun: yes;"> </span></div>Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com2tag:blogger.com,1999:blog-11259187.post-51508044733922337172011-08-22T13:09:00.003-05:002011-08-22T13:12:50.736-05:00Guest Blog at the "Keeping Current Matters" web-blogAfter a recent Wall Street Journal article stating appraisals were holding back the real estate market, my friend Steve Harney, a real estate veteran with a national following asked me for my thoughts and invited me to write as a guest blogger for his Keeping Current Matters (KCM) blog. <br />
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The link above brings you to the KCMblog.com to viewmy thoughts.Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com0tag:blogger.com,1999:blog-11259187.post-49956073560316018722011-07-01T09:21:00.000-05:002011-07-01T09:21:03.423-05:00Should I get an appraisal on my home?<div class="MsoNormal" style="margin: 0in 0in 10pt;"><b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">Recently, I was asked this question: We are planning to put our home up for sale and are interested in getting an appraisal so we understand what our home is really worth.<span style="mso-spacerun: yes;"> </span>Can we talk to you and understand if this is a good thing for us to do?<o:p></o:p></span></i></b></div><div class="MsoPlainText" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">My Response:</span></i></b><span style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"> </span><span style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">I think it is a very good idea to have an appraisal from a qualified and experienced appraiser to help guide you on your pricing strategy.<span style="mso-spacerun: yes;"> </span>Through the years, I have done many appraisals for both buyers to help establish an offering price, as well as sellers to help set their asking price.<span style="mso-spacerun: yes;"> </span>I also often work with Realtors who are working with their clients and want an independent opinion, from a disinterested third party.<o:p></o:p></span></div><div class="MsoPlainText" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoPlainText" style="margin: 0in 0in 0pt;"><span style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">I have over 20 years of experience in residential appraising in your market area.<span style="mso-spacerun: yes;"> </span>Because my business specializes in <i style="mso-bidi-font-style: normal;"><a href="http://www.wagnerappraisal.com/corprelo.asp"><span style="color: blue;">corporate relocation appraising</span></a></i>, my clients hire me for my accuracy, as I am asked to predict what a home will sell for and eventually after it does sell, my accuracy is tracked.<span style="mso-spacerun: yes;"> </span>I receive repeat business from those clients because of my accuracy.<span style="mso-spacerun: yes;"> </span>This experience leads to accurate appraisals that homeowners, lawyers and lenders can rely on.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div><div class="MsoPlainText" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoPlainText" style="margin: 0in 0in 0pt;"><span style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">My process would include viewing your property's interior/exterior, gathering information on your home's size, features and condition.<span style="mso-spacerun: yes;"> </span>I will be asking you of any improvements that you may have done to your property since you have lived there. <span style="mso-spacerun: yes;"> </span>You can expect that portion to take about an hour.<span style="mso-spacerun: yes;"> </span>My final appraisal report would be a thorough analysis of your home, suggesting potential improvements that may help marketability and/or the value.<span style="mso-spacerun: yes;"> </span>It would include analyzing the market, giving you a thorough picture of properties in your market area.<span style="mso-spacerun: yes;"> </span>I maintain specific statistics throughout Chicagoland (found at <a href="http://www.wagnerappraisal.com/report.asp"><span style="color: blue;">http://www.wagnerappraisal.com/report.asp</span></a>) and incorporate this data into my reports.<span style="mso-spacerun: yes;"> </span>I am the only appraiser that I know of in this area that collects this data in-house, and trends it to help measure the changes in the local real estate market.<span style="mso-spacerun: yes;"> </span>Others use various resources but I do this internally.<span style="mso-spacerun: yes;"> </span>I supply closed sales in my report, as well as current listings and properties that are under contract, as they all have an impact your home's value.<o:p></o:p></span></div><div class="MsoPlainText" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoPlainText" style="margin: 0in 0in 0pt;"><span style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">My fee for this service is based on the time it takes me to complete this process (please call or e-mail for a quote), and it typically takes me 5 business days to return my report after the inspection.<span style="mso-spacerun: yes;"> </span>An appraisal is an opinion, and the opinion is based on the experience and qualifications of the appraiser.<span style="mso-spacerun: yes;"> </span>In my industry, you will find many different people with various levels of experience and qualifications.<span style="mso-spacerun: yes;"> </span>They will also quote many different prices for their service.<span style="mso-spacerun: yes;"> </span>A couple of hundred dollars may make a difference of thousands of dollars in your bank account.<span style="mso-spacerun: yes;"> </span>Your goal is to establish a fair price to minimize your market time to a reasonable amount.<span style="mso-spacerun: yes;"> </span>Underpricing or overpricing is not beneficial to you, especially in this market.<span style="mso-spacerun: yes;"> </span>View <i style="mso-bidi-font-style: normal;"><a href="http://www.wagnerappraisal.com/resumes/CHIP-Bio%202-2011.pdf"><span style="color: blue;">My Bio</span></a></i> for my basic qualifications and a full resume is available upon request.<o:p></o:p></span></div><div class="MsoPlainText" style="margin: 0in 0in 0pt;"><br />
</div><div class="MsoPlainText" style="margin: 0in 0in 0pt;"><span style="font-family: "Calibri","sans-serif"; font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">Contact Chip Wagner at <a href="mailto:chip@wagnerappraisal.com"><span style="color: blue;">chip@wagnerappraisal.com</span></a> or (630) 416-6556 for a quote. <o:p></o:p></span></div>Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com1tag:blogger.com,1999:blog-11259187.post-70494065517440624142011-06-19T06:58:00.002-05:002011-06-19T07:05:33.828-05:00The Reason I Enjoy Teaching<span style="font-family: inherit;">In 2010, Worldwide ERC (Employee Relocation Council) released the new Summary Appraisal Report. It had significant changes since the last revision in 2001, and I was honored to be one of the five appraisers from across the country to work on this project.</span><br />
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<span style="font-family: inherit;">The appraisal industry lacks education on the "relocation appraisal niche" and I decided to write a 7-hour seminar on the subject for state continuing education for appraisers. My intent was to teach it to appraisers in Illinois through the Chicago Chapter of the Appraisal Institute, an organization that I am very involved with.</span><br />
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<span style="font-family: inherit;">In January 2011, my seminar was approved for continuing education in the state of Illinois, and I have since taught it in Chicago and Naperville. In both seminars, which had 30-35 students each time, appraisers came from other states for this education. It became obvious to me that I had something that nobody else was offering. At the same time, other chapters of the Appraisal Institute began contacting me to bring my seminar to their states.</span><br />
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<span style="font-family: inherit;">Since then, I have taught in Greensboro, North Carolina to 40+ students, East Brunswick, New Jersey to 60+ students, and 45+ students in Saint Paul, Minnesota. On deck is South Bend, Indiana, then on to Novi, Michigan and Peoria, Illinois.</span><br />
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</span><br />
<span style="font-family: inherit;">After teaching each of these seminars, I have received very favorable comments from my students, which certainly makes me feel very good. But this past week, I received what may be the ultimate compliment from a client who attended my seminar in New Jersey.</span><br />
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<div class="MsoNormal" style="margin: 0in 0in 0pt;"><strong><em><span style="font-family: "Calibri","sans-serif"; mso-fareast-font-family: "Times New Roman";">"I just want to thank you for the relocation appraisal seminar, last week in New Jersey.</span><span style="mso-fareast-font-family: "Times New Roman";"> </span><span style="font-family: "Calibri","sans-serif"; mso-fareast-font-family: "Times New Roman";">There was an appraiser there, that I met, who I had been dealing with for years. She said that she got a lot of good insight from your course, when I spoke to her, at the seminar.</span><span style="mso-fareast-font-family: "Times New Roman";"> <o:p></o:p></span></em></strong></div><strong><em> <span style="mso-fareast-font-family: "Times New Roman";"> </span></em></strong><br />
<span style="mso-fareast-font-family: "Times New Roman";"></span><strong><em><span style="font-family: "Calibri","sans-serif"; mso-fareast-font-family: "Times New Roman";">I just got an appraisal from her, and it is so much better than anything she had ever submitted before! She has statistical data and support for the adjustments made.</span><span style="mso-fareast-font-family: "Times New Roman";"> <o:p></o:p></span></em></strong><br />
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<span style="mso-fareast-font-family: "Times New Roman";"></span><strong><em><span style="font-family: "Calibri","sans-serif"; mso-fareast-font-family: "Times New Roman";">Thank you for what you are doing.</span><span style="mso-fareast-font-family: "Times New Roman";">"<o:p></o:p></span></em></strong><br />
<span style="font-family: "Calibri","sans-serif"; font-size: 10pt; mso-ansi-language: EN-US; mso-bidi-font-family: Arial; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;"><br style="mso-special-character: line-break;" /> <span style="font-family: inherit; font-size: small;">This message was perhaps the biggest compliment thus far. It tells me that I am making a difference, helping to make my profession better, even if it is just one appraiser at a time. This is the reason I enjoy teaching!</span></span><br />
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<span style="font-family: inherit; mso-ansi-language: EN-US; mso-bidi-font-family: Arial; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">Another client has been helping me to advertise my seminar by sending e-mails out to their appraiser panel. I told them in my last seminar, approximately 20% of the students have never done a relocation appraisal. I received this message from him:</span><br />
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<span style="color: black;"><strong><em><span style="font-family: Times New Roman;"> <span style="color: black;">"</span></span><span style="color: #1f497d; font-family: "Calibri","sans-serif"; font-size: 11pt;"><span style="color: black;">I am very encouraged to hear of any appraiser that is not currently doing relo that is attending these events. As we’ve discussed before, we (as an industry) have to be focused on attracting appraisers to the relo side of the profession. With the changing aging appraiser demographics in general and the limited proportion of that population currently involved in ERC appraisals – we have a two headed monster to tackle over the coming years. </span></span></em></strong></span><br />
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<div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="color: #1f497d; font-family: "Calibri","sans-serif"; font-size: 11pt;"><strong><em><span style="color: black;">I am confident with the right approach and industry partnerships, we can tackle the issue and shape the future of the industry. Thank you again for your efforts in getting the ball rolling."<o:p></o:p></span></em></strong></span></div><span style="color: black;"><strong><em><span style="font-family: Times New Roman; font-size: small;"> </span><br style="mso-special-character: line-break;" /> </em></strong> </span><span style="font-family: inherit;">If you are interested in taking my seminar, contact your local Appraisal Institute chapter, and have them contact me for more details.</span>Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com4tag:blogger.com,1999:blog-11259187.post-56200140373797297792011-04-06T09:02:00.003-05:002011-04-06T09:03:33.738-05:00NAR's Economists' Outlook: State by State estimate of Shadow InventoryCheck out the link to the full article. Interestng stuff.Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com0tag:blogger.com,1999:blog-11259187.post-1478418500230347142011-04-05T08:28:00.001-05:002011-04-05T08:29:18.058-05:00How hard is it to count a bath?BATHROOM COUNT<br />
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Per GSE UAD Appendix D 1.1 Field-Specific Standarization Requirements, "The appraiser must enter the total number of full baths and partial baths above grade. A three-quarter bath is to be counted as a full bath in all cases. Quarter baths (baths that feature only a toilet) are not to be included in the bathroom count. The number of full and half baths must be entered, separated by a period. The full bath count is represented to the left of the period. The half bath count is represented to the right of the period." <br />
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Tip: The guidance instructs the appraiser to use specific treatment of bathroom counts: "the count of ‘full’ bathrooms to the left of the period and the count of ‘half’ bathrooms to the right."<br />
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For example:<br />
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1.1 = One full bathroom (toilet, sink, shower) and one half bath (just a toilet and a sink)<br />
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2.3 = Two full bathrooms (both have toilets and sinks--one has a tub, the other a shower.) and three half baths <br />
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2.0 = Two full bathrooms (Commentary would be used to capture other non-conforming details that do not qualify as a half or full bath, such as, "The house has a sink in the garage and a toilet in the basement.")<br />
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The biggest house I have appraised? 8.3 baths. <br />
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Our MLS has followed this for many years. I guess my days of writing my appraisals "old school" are over.Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com1tag:blogger.com,1999:blog-11259187.post-16345638978807603672011-03-16T15:38:00.001-05:002011-03-16T15:39:01.737-05:00The Impact Foreclosures Have on House Prices<a href="http://kcmblog.com/2011/03/16/the-impact-foreclosures-have-on-house-prices/">The Impact Foreclosures Have on House Prices</a><br />
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Home values are again beginning to fall. What has caused this renewed downward pressure on prices? It can be directly tied to the number of distressed properties in the region which have shredded values in some marketplaces. Foreclosures and short sales impact prices in two major ways.<br />
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They are discounted competition to the house next door<br />
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When a home buyer decides to purchase, price is a major component in the equation. Every buyer wants to make sure they are getting an excellent deal especially after what has taking place over the last five years. According to RealtyTrac, foreclosures, on average, sell for a 41% discount and short sales sell for a 19% discount.<br />
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These distressed properties might not be in the same physical condition as the non-distressed properties. However, at sizable discounts, many purchasers are more than willing to do the necessary repairs. Every buyer who buys a distressed property is one less eligible buyer for the other homes. Less demand in a market with an oversupply of houses for sale means lower prices.<br />
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Distressed properties could impact your buyer’s appraisal<br />
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We had the honor to speak at the Leading Real Estate Companies of the World Conference and the RELO Direct Corporate Forum last week in Las Vegas. Chip Wagner of A. L. Wagner Appraisal Group, Inc. also spoke. He is a third generation appraiser and an industry icon who will be inducted into Worldwide ERC’s prestigious “Hall of Leaders” in May in recognition of his years of hard work in the field. <br />
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At the conference, Mr. Wagner explained: <br />
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“Recently appraisers have been accused of prolonging the nation’s real estate downturn by developing value opinions that are below proposed sales prices. Specifically, we have been accused for using distressed properties among the comparable sales used in the valuation process.<br />
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If a specific market area has a low amount of distressed listings and comparable sales, it is likely there is little impact on property values, and we may be seeing appreciation taking place. A ‘low amount’ would be under 10% to 15%. In market areas where there is a high amount of distressed market competition, typically greater than 1/3 of the market, this distressed competition has to be analyzed as this is the new ‘norm’ for that market area. Buyers active in that area are looking at all of the competing properties and making their purchase offers and buying decisions based on all of the information available to them. Sometimes the appraisers are using that data, and sometimes they are not. The important thing is that the appraiser properly research and analyze each property, understanding the differences in seller motivations and the condition between the properties.”<br />
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These properties sell at substantial discounts. When they are used as comparable sales, they could dramatically impact values.<br />
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Bottom Line<br />
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The number of distressed properties coming to market is increasing and will create downward pressure on house prices throughout 2011.Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com0tag:blogger.com,1999:blog-11259187.post-5120161711675626692011-03-16T15:37:00.002-05:002011-03-16T15:37:15.860-05:00The Impact Foreclosures Have on House PricesChip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com0tag:blogger.com,1999:blog-11259187.post-58589719335518816432011-01-07T18:46:00.001-06:002011-01-07T18:52:35.627-06:00Featured Appraiser of the MonthAppraiser profile: Alvin “Chip” Wagner of Chicago, Illinois<br />
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By: Ronald Huiskamp <br />
Published: January 6, 2011 <br />
Categories: Appraiser profile<br />
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Name: Alvin “Chip” Wagner, SRA, SCRP<br />
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Company: A.L. Wagner Appraisal Group, Inc.<br />
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Experience: Real Estate Appraiser since 1988<br />
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Area: Chicago Metropolitan Area; focus on Western and Southern regions<br />
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Credentials: SRA Designated Member – Appraisal Institute; Senior Certified Relocation Professional (SCRP) – Worldwide ERC<br />
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<strong>Please share your professional and educational background, industry experience and any designations and professional groups.</strong><br />
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I received my B.S. in Business from Bradley University in 1990. They did not offer a real estate minor, but I took 15 hours of real estate related courses as an undergraduate. I have over 28 years of experience, which includes 21 years full-time as an appraiser, and 7 years part-time during high school and college while working for my father’s real estate appraisal company. Currently hold the Appraisal Institute’s SRA Designation and am serving as the Chicago Chapter President in 2011. Earned the Worldwide ERC©’s SCRP designation; active member in the Relocation Appraisers and Consultants (RAC) and have held nearly every position in RAC including President in 2004. Also a member of the Chicagoland Corporate Relocation Council (CRC), a regional relocation group, and am the only appraiser to ever preside as President of CRC (in 2001).<br />
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<strong>What are your specialty appraisal areas, i.e. relocation, estate, tax, others?</strong><br />
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My business has always specialized in relocation appraisals. My father joined ERREAC (original name for Worldwide ERC) in 1965; between us, we have attended every ERC conference for over 35 years. Through the years my residential appraisal business has expanded and contracted as business opportunities have changed. Currently, over 90% of my business is relocation appraising, and the other business is private party appraisals, some attorney/litigation work, and one lending client’s wealth division, where I bid to complete multi-million dollar complex properties.<br />
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I have published an annual Supply/Demand market study since 1993.<br />
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<strong>What led you to pursue a career as a professional real estate appraiser?</strong><br />
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Literally I was born into this business and doubt whether I could have controlled my destiny. My granduncle Percy E. Wagner received his MAI in 1934 and was national president of the American Institute of Real Estate Appraisers in 1964. My father, Alvin Wagner Jr., SRA, SCRP spent his entire career as a real estate appraiser. While working with and for my father, I signed my first appraisal when I was a sophomore in high school after spending previous summers assisting my father on appraisal inspections, learning techniques for data collection at the subject property as well as the comparable properties. One day my father said, “Why don’t you fill out the form yourself?” After I turned in the report, he reviewed and made changes, however, he kept my valuation the same then put my name on the “Appraiser” line and his name on the “Review Appraiser” line. I still have that file with a lot of his notations and changes in red pen!<br />
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My senior project (in college) in ‘Entrepreneurship Class’ was “The Benefits of Computerizing a Real Estate Appraisal Business.” Right after I started working for my father full time, I computerized his business. Since I had already been writing appraisals for a few years I enjoyed the flexibility of the job. My father started treating me like a “partner” versus an employee, and eventually settled into my career.<br />
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Like father – like son? This past summer I took my 5-year old son on his first appraisal inspection and taught him how to use a laser measuring device; when I was his age I had to hold the dumb end of the tape! The next generation has it so easy!!<br />
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<strong>What do you find is the most rewarding part of the appraisal profession? </strong><br />
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For the majority of my career, I feel like I have been helping people to buy homes. If it wasn’t worth what they were paying, I was helping them financially from making a poor decision by overpaying. In relocation, I truly believe that I am helping the transferee during their complicated and stressful process of being relocated.<br />
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Most recently, it has been a difficult period in my career. One gets the feeling that everything that is done is questioned and challenged, and nobody is happy with the final product. It is often a thankless daily environment.<br />
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It is on rare occasions that clients will take time out of their day to thank appraisers or give positive feedback. It can be a difficult environment to work under, but appraisers have become accustomed to it. Most appraisers are working out of their homes, and/or are small one or two person operations, allowing little opportunities for daily dialogue.<br />
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This is why I am very proactive in various groups and associations. An old analogy, “the more you give, the more you receive.” I have given countless hours to the relocation industry, and it has rewarded me with a generous volume of relocation appraisal work, and I have made friends throughout the industry.<br />
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Day in and day out, I enjoy the challenges of always working on something different, speaking to someone new, learning from some, and teaching others.<br />
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<strong>What attributes make for a client that you enjoy working with?</strong><br />
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A client that does not micromanage the entire appraisal process is ideal. Constant calls or e-mails for status updates, even when an appraisal is not due for a couple days can be challenging. Stopping to answer that call, or return a message causes the appraiser to stop what they are doing to address the client’s questions.<br />
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Once expectations are set, and the appraiser meets or exceeds them, the client should not be micromanaging the process. But it is also a two-way street; the appraiser must communicate any challenges or potential delays immediately.<br />
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As simple as it sounds, but I enjoy working with a client who reads my reports. Most often it is quite obvious when a client reads our entire appraisal report or only looks at a few key areas during the review. Good appraisers spend a lot of time to research and then write a thorough report – many people just want to see the final number and back into questions from that.<br />
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Having worked for numerous clients in different industries for different purposes, I truly enjoy working with clients in the relocation industry the most.<br />
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<strong>How would you describe the current market conditions in your area?</strong><br />
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The Chicago market area seemed to peak in the 4th quarter of 2005, and in retrospect, problems started at that point. We didn’t initially see declining values for another couple of years, and then as unemployment grew, the markets worsened. I believe that 2009 will go down as the worst year as far as property value declines, and 2010 will be the year of the beginning of stabilization.<br />
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In tracking the various communities in the entire region, as well as analyzing sub-markets and price ranges, it is clear that about half of the region has not hit the bottom yet, and half of the region is showing signs of improvement. Improvement could include falling inventory levels, declining days on market, and stabilizing or increasing price trends.<br />
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Some areas, especially areas that had a lot of new construction heading into this great real estate recession, are still having real challenges. Less established areas are suffering from builder bankruptcies, foreclosures and short sales and continue to have high inventory levels and extended market times. Communities with good schools and proximity to public transportation and Interstates are doing better – especially in favorable price ranges. In the more established areas, I am seeing fewer problems with resale and inventory levels are half of what they were 1-2 years ago.<br />
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One cannot throw a blanket across the entire region for a clear picture, each sub-market is different, and the client relies upon the relocation appraisal specialist to convey the message.<br />
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<strong>How do you foresee your market changing over the next year?</strong><br />
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Favorable interest rates are helping, but tight lending standards have muddied up the waters. I continue to believe that the housing market is directly tied to unemployment and underemployment. Once people earn a fair wage, they will be able to afford their house payments and many of the problems will fix themselves. We have seen modest improvement in unemployment, but many of those employed are settling for jobs making far less than what they used to, so they are underemployed.<br />
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As markets try to improve (bottom out, start seeing appreciation, etc.) there will be new challenges because the typical mortgage appraiser is not trained to read the market like an experienced relocation appraiser. And due to the seasonality of our marketplace (especially in the snow belt), trends might not be affirmed for 3 to 6 months after they started.<br />
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The continued talk of the “shadow market” and homes that are in the process of foreclosure but have not hit the market is a continued concern. This is because nobody can really put their finger on the impact and the number of homes in a given market area. I see the next year as a continued challenge, with continued “good new, then bad news” that we have seen in the media.<br />
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<strong>What’s do you feel is the biggest challenge facing the appraisal industry?</strong><br />
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There are so many new issues and challenges in the appraisal industry, and the more regulation and intervention, the worse it is. It started with the sub-prime industry, and was a snowball effect across the rest of the lending industry, eventually leading to the HVCC and other regulations. The end-users of appraisals no longer trust the appraiser. They do not want to know “what the home is worth,” but rather “will it fit into their underwriting standards.” Much of the blame can also be put on the appraisers who have not provided an adequate product. It is for these reasons that I have stepped away from mortgage lending work, and concentrate on the business that embraces the quality of work that I do, and clients that trust my value.<br />
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I feel the biggest challenge of the “relocation appraisal industry” in 2011 is the release of the new ERC Summary Appraisal Report which goes into effect on 1/1/2011. I was privileged to have worked with ERC and relocation appraiser legends Arnold Schwartz, Jay Delich, Jeff Barta and Craig Gilbert to design the new form. This form will force appraisers into a more in-depth market analysis. It will take some time for appraisers, reviewers, and consultants alike to get used to the changes, but at the end of the day, the winner will be the client who will benefit from this new improved format.Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com1tag:blogger.com,1999:blog-11259187.post-71512859533418062532010-11-27T16:43:00.003-06:002010-11-28T08:58:08.603-06:00Taking the Reigns <br />
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<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgi46BK-d1zMkNi3S1F_BWLruCw5QPJKKnu6dB8OPwp1EcuZtneOjvVYedVH_jZwyEOXrB1hmp7tDVYIR41I-UtOsyr4As3sOatIdNVNI49OhGUNeIOf6J5e4j-6NFrM4_4fMj-/s1600/DSCN0993.JPG" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="240" ox="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgi46BK-d1zMkNi3S1F_BWLruCw5QPJKKnu6dB8OPwp1EcuZtneOjvVYedVH_jZwyEOXrB1hmp7tDVYIR41I-UtOsyr4As3sOatIdNVNI49OhGUNeIOf6J5e4j-6NFrM4_4fMj-/s320/DSCN0993.JPG" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">(L-R) Chip Wagner, SRA - President, Tim Rooney, SRA - President-Elect; <br />
Paul Gillespie, MAI - Vice President, Sharon Bagby, SRA - Treasurer<br />
Joe Magdizarz, MAI, SRA - 2011 National President of the Appraisal Institute</td></tr>
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On November 19, 2010, I was installed as the 2011 President of the <a href="http://www.ccai.org/">Chicago Chapter of the Appraisal Institute</a>. My term officially begins on 1/1/2011.<br />
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The Appraisal Institute is a global membership association of professional real estate appraisers, with more than 25,000 members and 91 chapters throughout the world. Its mission is to advance professionalism and ethics, global standards, methodologies, and practices through the professional development of property economics worldwide. Organized in 1932, the Appraisal Institute advocates equal opportunity and nondiscrimination in the appraisal profession and conducts its activities in accordance with applicable federal, state and local laws. Members of the Appraisal Institute benefit from an array of professional education and advocacy programs, and may hold the prestigious MAI, SRPA and SRA designations. For more information regarding the Appraisal Institute, please visit <a href="http://www.appraisalinstitute.org/">http://www.appraisalinstitute.org/</a>.<br />
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The Chicago Chapter of the Appraisal Institute has approximately 1,200 members throughout northern and central Illinois, of which about 500 hold the prestigious <a href="http://www.appraisalinstitute.org/designations/MAI_Designations.aspx">MAI</a>, <a href="http://www.appraisalinstitute.org/designations/SRPA_Designations.aspx">SRPA</a> and <a href="http://www.appraisalinstitute.org/designations/SRA_designations.aspx">SRA</a> designations.<br />
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This is an honor and a privilidge to serve my profession and my peers in such a capacity. The Appraisal Institute and giving to my industry runs deep in my blood. My father Alvin L. Wagner, Jr., SRA, RM served on the AIREA Governing Council in the 1970's (national board of directors), and my granduncle, Percy E. Wagner, MAI, SRA, CRE served as the 1942 Illinois Chapter President of the AIREA, and 1960 National President of the AIREA.<br />
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I am looking forward to the challenge ahead of me. The underlying theme of my presidency will be share the goals of our national president Joe Magdziarz, MAI, SRA, and those are to get back to the Institutes's core values: Education, Ethics, and Designating Qualified Members.<br />
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The first order of business is to line up appraisers to serve on 2011 chapter committees. The committees will be challenged to work throughout the year to advance our goals.<br />
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As far as <strong>Education</strong>, our 2011 schedule is being finalized, and 2011 will be a license renewal year. The Chicago Chapter puts on more courses annually than any other chapter in the country. We average 90 courses/seminars per year, and nearly half of the students come from outside of our chapter. I challenge our membership to take all of your courses from your chapter. Whether you are upgrading from licensed to certified, pursuing your professional designation, or renewing your license, our chapter is sure to offer the course you are looking for. Our chapter headquarters are located at 205 W. Wacker Drive (southwest corner of W. Wacker Drive and N. Wells Street. Parking is next door, and public transportation is convenient as Union Station is just 0.9 miles away, or an 18 minute walk. We feature<a href="http://www.ccai.org/cecc.html"> state of the art classrooms for presentations</a>, to enhance your learning experience. Select seminars are also being planned for suburban locations and downstate locations in 2011. Come out and see our first rate facilities, our top-ranked publications and textbook, and our qualified and committed instructors. <br />
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<strong>Ethics</strong> is defined as the study of standards of conduct and moral judgement. As members of the Appraisal Institute, we adhere to a strict code of professional ethics. Our standards of professional practice is above and beyond our industry's minimum guidelines. Our clients have the confidence in the higher ethical responsibility of a designated member of the Appraisal Institute, ultimately, for the benefit of public trust.<br />
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Finally<strong> designating qualified members</strong> is going to be a goal for 2011 - that combined with member retention and bringing in new associate members into the Chicago Chapter. <br />
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There are many qualified appraisers who should be members of the Appraisal Institute for the <a href="http://www.appraisalinstitute.org/membership/benefits.aspx">many benefits</a>, including group insurance; discounts on education and publications; publications including the monthly Valuation magazine and the quarterly Appraisal Journal; legislative advocacy (we have the ear on capitol hill); business tools; technology; networking and leadership development; marketing and public relations; member service center; and member discounts on products and services from affinity partners. Personally, I take the most from the networking opportunities. You have to participate and attend events to recoup the benefits of this - get involved!<br />
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Those who are already associate members, we need to help those members towards achieving their designation. The Appraisal Institute is losing more members to retirement annually than we are granting new designees. Some may be one component away from their designation, such as the demonstration report or the comprehensive exam, while others may be several courses away. We need to answer the questions and help guide them along on their journey.<br />
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My mission is no member left behind, as it is critical that we retain our membership. The Chicago Chapter has members throughout the state - the former members of the Heart of Illinois Chapter - as far as Champaign County (9), Madison County (10), McLean County (15), Peoria County (13), Sangamon County (10), Tazewell County (5). We will reach out to our members outside of the Chicago area for courses/seminars and a meeting in 2011.<br />
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I look forward to a fun and productive year in 2011, and if any appraiser (or user of appraisal services) should ever have any questions about the Appraisal Institute or the Chicago Chapter, please do not hesitate to call or e-mail me.Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com0tag:blogger.com,1999:blog-11259187.post-90208810722792744852010-08-24T16:49:00.001-05:002010-08-24T16:54:09.571-05:00The Reality of the Sales Volume NumbersToday, there have been all sorts of news stories about the decline of the real estate market.<br />
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The following is an excerpt by ALAN ZIBEL and J.W. ELPHINSTONE of the Associated Press (<a href="http://www.chicagotribune.com/business/sns-ap-us-home-sales,0,6400813.story">http://www.chicagotribune.com/business/sns-ap-us-home-sales,0,6400813.story</a>)<br />
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<strong><span style="font-size: x-small;">"Previously Occupied Home Sales Sink 27 pct. to Lowest Level Since 1995 as Economy Weakens</span></strong><br />
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<em><span style="font-size: x-small;">Sales of previously occupied homes plunged last month to the lowest level in 15 years, despite the lowest mortgage rates in decades and bargain prices in many areas.</span></em><br />
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<em><span style="font-size: x-small;">July's sales fell by more than 27 percent to a seasonally adjusted annual rate of 3.83 million, the National Association of Realtors said Tuesday. It was the largest monthly drop on records dating back to 1968, and sharp declines were recorded in all regions of the country.</span></em><br />
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<em><span style="font-size: x-small;">The plunge in home sales also magnified fears about the broader economy.</span></em><br />
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<em><span style="font-size: x-small;">"The housing market is undermining the already faltering wider economic recovery," said Paul Dales, U.S. economist with Capital Economics. "With the increasingly inevitable double-dip in prices yet to come, things could yet get a lot worse."</span></em><br />
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<em><span style="font-size: x-small;">Sales were particularly weak among homes in the lower- to mid-priced ranges. For example, in the Midwest, homes priced between $100,000 and $250,000 tumbled nearly 47 percent.</span></em><br />
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<em><span style="font-size: x-small;">As sales have slowed, the inventory of unsold homes on the market grew to nearly 4 million in July. That's a 12.5 month supply at the current sales pace, the highest level in more than a decade. It compares with a healthy level of about six months."</span></em><br />
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Further in the article, it states: <br />
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<span style="font-size: x-small;"><em>"The drop in July's sales was led by 35 percent plunge in the Midwest. Sales were down 30 percent in the Northeast, 25 percent in the West and 23 percent in the South."</em></span><br />
Once again, NAR has released statistics that may be difficult to understand. These statistics are pertaining to Sales Volume (or the total number of homes to sell). True, the decline is significant, if not staggering. The Midwest is down 35%, but according to the Market Report statistics in the MRED, Inc. (Chicago area's local MLS Service), it is 39.25%. This is shown in the following table. <br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEit4gw9FCHiuizqgu33I3NK0PL_QH9z1ICTFOW5Px9Dai-h7vj5DVybqVkTJl_YCVoyNOlLtixTGn91zouMbyt-5V-ViALooRZOCakUPQ63xj39C4jEU-PeoT489bLrxUEaVo-0/s1600/June-July+Sales+Volume.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="186" ox="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEit4gw9FCHiuizqgu33I3NK0PL_QH9z1ICTFOW5Px9Dai-h7vj5DVybqVkTJl_YCVoyNOlLtixTGn91zouMbyt-5V-ViALooRZOCakUPQ63xj39C4jEU-PeoT489bLrxUEaVo-0/s640/June-July+Sales+Volume.png" width="640" /></a></div><br />
The article quotes statistics such as largest drop since 1995, and the largest monthly drop since 1968. Professionals in the real estate industry do not want buyers and sellers to panic with these numbers. <br />
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There is no question that the drop was significant, if not alarming. But to better understand the drop, readers should understand Closed Sales typically drop at this time of the year. This is due to the Spring market activity (contract pendings) that take place in March, April and May, that close in May and June. Now the July activity shows the summer slowdown that continues into the Fall and Winter months, traditionally called "Seasonal Markets." <br />
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A significant portion of the 39.25% drop reflects an accelerated demand that took place due to the tax homebuyer incentive program that existed until April 30, 2010. <br />
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One way to look at the combined June/July statistics and see that according to the figures above, in 2009, the total was 14,957 residential units closed in the Chicago area, while in June/July 2010 a total of 15,631 homes closed in the Chicago area, which actually shows a <strong>4.51% INCREASE from 2009 to 2010</strong>. <br />
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In fact, the sales volume from 2008 to 2010 <em>also </em>shows an <strong>increase of 1.94%</strong>. This is good news. A wait-and-see approach of how the rest of the year will pan out would be the best approach rather than alarming the John Q. Public. See the table below.<br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhX5mYJcrE5MmThc4S_xMx_nQZKTfEId5DiX9Z2Vm6xBzSS-WFDQV2EjgF0Ble9mTlQcOGVi5WbtpoODxNFKZWcyxK8bHMyEaTodoBsyk4SvAru3cmg11jDsONJLdNiWoIqmF2P/s1600/June-July+Sales+Volume2.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="200" ox="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhX5mYJcrE5MmThc4S_xMx_nQZKTfEId5DiX9Z2Vm6xBzSS-WFDQV2EjgF0Ble9mTlQcOGVi5WbtpoODxNFKZWcyxK8bHMyEaTodoBsyk4SvAru3cmg11jDsONJLdNiWoIqmF2P/s640/June-July+Sales+Volume2.png" width="640" /></a></div><br />
The real issue here is yes, the decline reported by NAR today has been very significant: significant enough to shift the stock market and is at the headlines of major newspapers and radio and television have reported this story. But the fact that the tax incentive accelerated the demand for housing this Spring, and because it expired on April 30, 2010 (date the property had to be under contract), it shifted the Spring market forward - much like the "cash-for-clunkers" program did for the auto industry - it accelerated the demand and left the industry with a hangover. <br />
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The overall bigger picture is more homes sold during this period in 2010 than in 2009 or 2008. Perhaps the most telling tale is looking at the Chicago area's year-to-date Sales Volume. See the table below for a brighter picture.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZXz3kYA4hIaGdVnL4vZKSkEgvgA9TbHbLeH0D5xfJx9yRTIemidB4SxciescKKnBHSuveFwyq7BOpoiyY1Neync7fAqdRGcaGiKRlW14-kbYyd1ed3qPLz2LRkxoZPn8GiVs-/s1600/Jan-July+Sales+Volume.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="218" ox="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZXz3kYA4hIaGdVnL4vZKSkEgvgA9TbHbLeH0D5xfJx9yRTIemidB4SxciescKKnBHSuveFwyq7BOpoiyY1Neync7fAqdRGcaGiKRlW14-kbYyd1ed3qPLz2LRkxoZPn8GiVs-/s640/Jan-July+Sales+Volume.png" width="640" /></a><br />
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According to the statistics above, 2010 is outpacing both 2008 and 2009 in the year-to-date sales volume. It is 2.51% ahead of 2008's sales pace and 22.05% ahead of 2009's sales pace. This is wonderful news. The sudden drop again, was fueled by the accelerated demand of the housing credit program.<br />
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The headlines and articles are very "doom-and-gloom" today. I offer another perspective with these figures. I still believe our local real estate market is trying to improve, and the discussion of another recession and the nervousness on Wall Street is not contributing to positive consumer confidence. As I have said many times over, we need the unemployment to get better and that will solve many of our real estate problems.<br />
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Contact Chip Wagner, SRA, SCRP at <a href="mailto:chip@wagnerappraisal.com">chip@wagnerappraisal.com</a> or at (630) 416-6556Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com4tag:blogger.com,1999:blog-11259187.post-60361966353375951862010-08-18T22:25:00.005-05:002010-08-19T14:46:55.845-05:00THE GREAT SQUARE FOOTAGE MANDATE<span style="font-size: x-small;">Author’s note: Please realize the terms “square footage” and “gross living area” are used synonymously in this blog. </span><br />
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<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjqB-ZQZmKMSHaY8KBuQSoyPvkyWTomIVHJOrkkF0vWioZC4wMh2ZuLWQt-fkNgSmqaFShjBr0oh-xTlTVEE9yzhWbLWFwV7I86UQmbDeiVDJJwpTw3iZJVY3kkwYMqvQq1WyuI/s1600/Lufkin.jpg" imageanchor="1" style="clear: right; cssfloat: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="199" ox="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjqB-ZQZmKMSHaY8KBuQSoyPvkyWTomIVHJOrkkF0vWioZC4wMh2ZuLWQt-fkNgSmqaFShjBr0oh-xTlTVEE9yzhWbLWFwV7I86UQmbDeiVDJJwpTw3iZJVY3kkwYMqvQq1WyuI/s200/Lufkin.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><strong><span style="font-family: Times, "Times New Roman", serif;">Most common tool appraisers use</span></strong><br />
<strong><span style="font-family: Times, "Times New Roman", serif;">is the fiberglass tape measure</span></strong>.</td></tr>
</tbody></table>Today it became official in the Chicago area… real estate brokers and salespeople must now include the property’s square footage on their MLS listings. Our MLS system, the Midwest Real Estate Data, Inc., has a field on the listings called ASF, or Approximate Square Footage. Effective 8/17/2010, it will be mandatory that the agent populate this field instead of leaving it blank. <br />
<br />
Historically, it was always said that Realtors in our market were advised not to complete the field because their brokers would reference a lawsuit in which a Realtor advertised a Gross Living Area (or Square Footage) on a listing that was inaccurate. The Realtor and their company were sued for advertising an inaccurate size, and eventually lost the suit. <br />
<br />
Today, for the properties that I analyze in our MLS system, I would estimate about 20% of the properties have an Approximate Square Footage reported. Some regions are better than others. Some agents actually measure the property, other agents use the square footage from the local assessing body, and others use the total reported by the builder. <br />
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<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdFGRWhZaRUERcwHOy936lkWugqO5MMdAc5hslC38ezRh_QizSe_lRZbw1m8RXO-BPGKL0gLRSd_aLDXf47xtdWVM6oW4zL2VJIJVvwBb7DpUkUXiMQrMa9CfxDOVuiT7MBX3x/s1600/Stanley.jpg" imageanchor="1" style="clear: left; cssfloat: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="200" ox="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdFGRWhZaRUERcwHOy936lkWugqO5MMdAc5hslC38ezRh_QizSe_lRZbw1m8RXO-BPGKL0gLRSd_aLDXf47xtdWVM6oW4zL2VJIJVvwBb7DpUkUXiMQrMa9CfxDOVuiT7MBX3x/s200/Stanley.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><strong><span style="font-size: x-small;">You are more likely to see one of these</span></strong><br />
<strong><span style="font-size: x-small;">with a carpenter than an appraiser</span></strong></td></tr>
</tbody></table><br />
Under the new mandatory requirement, the agent will also be required to report the “source” of the square footage amount, and that could be any of the following: Appraiser, Assessor, Builder, Landlord/Tenant/Seller, Plans, Survey, or Taped. Furthermore, they even have the following options available: Other, Estimated, or Not Reported. (The entire instruction at the bottom) My hope is the agent will either measure the home, use the plans (or blueprints), or use the assessor’s figure. A problem is many assessors have inaccurate data, and some in the Chicago metropolitan area are not even available. My fear is most agents will select “Not Reported” or put “Estimated” or “Other.” How many might just put 3,000 sq.ft. and Estimated as the source. That doesn't help us out at all. I'd rather have Not Reported.<br />
<br />
And how much credence do we put in a Landlord’s, Tenant’s or Seller’s opinion of the size of their home? I have yet to meet an owner who really knows the size of their home. Most will over-emphasize the size (unless they are talking to their local township assessor - then they want it smaller). <br />
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<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgKHJQFVhyphenhyphenhhIeOMALmKXmWSNQ8vhBympQUIe0ZtkPEdxIXfvxQZSldVfsdBAJmXaMiuUxhJFeceHvZtQ-pp1A-VHtG3wBOpXGHw1JeAyh0Aa5V8TEaR8W75HES-0Z6nMGo0o3x/s1600/Wheel.jpg" imageanchor="1" style="clear: right; cssfloat: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="200" ox="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgKHJQFVhyphenhyphenhhIeOMALmKXmWSNQ8vhBympQUIe0ZtkPEdxIXfvxQZSldVfsdBAJmXaMiuUxhJFeceHvZtQ-pp1A-VHtG3wBOpXGHw1JeAyh0Aa5V8TEaR8W75HES-0Z6nMGo0o3x/s200/Wheel.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><strong><span style="font-size: x-small;">The old school roto-wheel. Some</span></strong><br />
<strong><span style="font-size: x-small;">appraisers still are comfortable with this</span></strong><br />
<strong><span style="font-size: x-small;">but it is the least accurate tool.</span></strong></td></tr>
</tbody></table><br />
<div style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: medium none;">Another fear is “Builder” will be selected as a source on new construction properties, and the realities of this are some builders do not always follow any standards for calculating the size of their homes. The biggest problem that I personally see is condominium units in the City of Chicago. Builders often include more than the inside walls of the living area in the square footage. They include balconies, storage spaces, and even garage spaces in their advertising. I have measured too many condos in the City of Chicago at 925 square feet, only to have the builder advertise to the buyer that the size is 1,250 square feet, with their rationale being because they include 50% of the common hallway (3’ x 20’ = 60 square feet), the 4’ x 10’ (40 square feet) balcony, the 5’ x 5’ storage locker (25 square feet) and a 10’ x 20’ garage space (200 square feet). When the appraiser measures the true gross living area, and it is 925 square feet, the property owner either thinks the appraiser is absolutely wrong because the builder would never lie, or they feel cheated by the builder. Either way, this is definitely a bad scenario to be in, and I have been there dozens of times through the years. Not all builders and developers do this, but it definitely happens.</div><div style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: medium none;"><table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_qKJ-4NIhxFgPpE5YgwFUusJHqXYfaquF8lspj3yCEnv53Kk2Jb6tqLqAOBXyfyEqR9IF16oom9-U26rqRxV7OlMyu7x7L55mjqXhIdJQrD2wnxtsZsvvAKIs3QDFt1pHK4ko/s1600/Condo+sketch.png" imageanchor="1" style="clear: left; cssfloat: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="186" ox="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_qKJ-4NIhxFgPpE5YgwFUusJHqXYfaquF8lspj3yCEnv53Kk2Jb6tqLqAOBXyfyEqR9IF16oom9-U26rqRxV7OlMyu7x7L55mjqXhIdJQrD2wnxtsZsvvAKIs3QDFt1pHK4ko/s200/Condo+sketch.png" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><strong><span style="font-size: x-small;">Simple Condo floorplan</span></strong></td></tr>
</tbody></table></div><div style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: medium none;"><br />
</div><br />
<div style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: medium none;"><strong>WHY IS GLA OR SQUARE FOOTAGE IMPORTANT?</strong></div><br />
<div style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: medium none;">One of the critical items of comparison when a real estate professional analyzes a property is the actual size of the property. As an appraiser, we calculate the Gross Living Area (GLA) of the property that we are appraising (the subject property), and the result is a number calculated in square footage. We don’t include attics or basements, or rooms lacking proper insulation and heating/cooling that could be considered a “three-season porch.” Rest assured, finished basement areas do get credit in the value of the property - significant credit in many cases. I have seen people that have invested in excess of $250,000 in their basement finish with multiple rooms, extensive bars or kitchens, media rooms that rival you local movie theater, and even indoor golf ranges. They are just not included in the above grade living area of the dwelling. Same thing goes for attic and other areas.</div><table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfljCFEEDkcsZ3Vm7N67xBh7h5lmlENNdyamqVT0ze4yuzaH0TjsOLAJmaRPI4rckkU-IJ-lLXjcNg_tP4NRXHahbbdLc0jyYw9YT_YcYZSWEfWYHPQqFIAacwAD_7-KzWlar9/s1600/Condo+sketch2.png" imageanchor="1" style="clear: right; cssfloat: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="173" ox="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfljCFEEDkcsZ3Vm7N67xBh7h5lmlENNdyamqVT0ze4yuzaH0TjsOLAJmaRPI4rckkU-IJ-lLXjcNg_tP4NRXHahbbdLc0jyYw9YT_YcYZSWEfWYHPQqFIAacwAD_7-KzWlar9/s200/Condo+sketch2.png" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><strong><span style="font-size: x-small;">Example of a floorplan with angles - </span></strong><br />
<strong><span style="font-size: x-small;">these are a real challenge to measure!</span></strong></td></tr>
</tbody></table><br />
While I applaud this new MLS requirement, I am very skeptical that it will be meaningful or successful in the short term. It is still better than what we have had. I've seen other MLS systems in different parts of the country that have GLA as a field, and they can produce some excellent cost per square foot statistics.<br />
<br />
I say I am skeptical because my years of knowing fellow appraisers who can't measure a home. I'll explain my point. <br />
<br />
In completing an appraisal, the appraiser is required to measure the home to find the size. Then the appraiser compares (aka comparables) the home they are appraising to other homes listed or sold. The appraiser must confirm that home’s size in square footage. It is very important to have accurate information, and the appraiser often has to research multiple sources for that data. Even if agents are populating that field today, the appraiser must confirm from a reliable source, such as in public records.<br />
<br />
My appraisal business specializes in "relocation appraisals." The <em>relocation appraisal </em>is a specialized niche, and helps an employer establish a transferring employee’s home value for a guaranteed buyout. The <em>relocation appraisal </em>is unique in the fact that a “peer appraisal” is completed on the property being appraised. The clients who order relocation appraisals typically maintain in-house databases of the <strong><em>most experienced</em> </strong>residential appraisers to complete these appraisals because of the <em><strong>high level of accuracy that is demanded</strong></em>. Furthermore, because the home actually sells after the appraisal is completed, the appraiser's accuracy is tested against their value opinion, something not found in lending appraisals. This is because in a lending appraisal, if it is a sale, the value is given to them; and if it is refinance appraisal, it doesn't sell so it could be high or low and we would never know. Note: I have been appraising since the mid-1980's and have completed <em>relocation appraisals </em>on close to 5,000 homes in the Chicago area.<br />
<br />
One issue that may frequently arise in <em>relocation appraisals</em> are “square footage discrepancies.” One of the requirements is that both appraisers personally measure the subject property and be within 100 square feet of one another. If they are “out of spread,” both sketches are shared with the other appraiser, so that they may attempt to see where the differences may lie and come to a conclusion on the home’s size. If it cannot be resolved, the client requires the appraiser to return to the property to remeasure the home. I can tell you from personal experience, all it takes is a couple of times being asked to return to a property that might be 30 miles away, for you to be pretty darn sure in your future accuracy in measuring a home the first time. I laser-measure every dimension inside and outside as a check and balance. Residential appraisers who do appraisals for other purposes (lending, etc.) typically don’t ever have the “peer appraisal” element, therefore are never challenged on their accuracy in measuring a home.<br />
<br />
My point in this explanation is that square footage discrepancies often arise in <em>relocation appraisals</em>. Sometimes it is because one appraiser rounded to the nearest foot, while another measured to the inch. Other times it is due to the difficulty in measuring these homes as the complexity of residential construction over the past few decades has resulted in unique layouts and floor plans, with cantilevers, bays, angles, open areas, areas over dead space or garage areas, etc. - not a simple rectangle like homes built 30, 50, 100+ years ago. See the images below. And I hate to say it, but sometimes I've seen appraiser sketches that do not even resemble the layout of the home.<br />
<br />
<div style="text-align: center;"><strong><u>COMPLEX SKETCH</u></strong></div><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxzYTQjzUOAOHcgdDTSlAi1XrDWn_DKwi_P6nR7NrDIYFEm-ZPYONNbFzxknVGl1SDrPzo_y_D8vM73hw4vxfTFgEHY-Jej5hXa-jycSeI_hzDFLlDsvNmnqZ-UVs-hJofGfgj/s1600/Complex+sketch.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" ox="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxzYTQjzUOAOHcgdDTSlAi1XrDWn_DKwi_P6nR7NrDIYFEm-ZPYONNbFzxknVGl1SDrPzo_y_D8vM73hw4vxfTFgEHY-Jej5hXa-jycSeI_hzDFLlDsvNmnqZ-UVs-hJofGfgj/s320/Complex+sketch.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><strong><span style="font-size: x-small;">The above sketch is a 12,000 square foot home in Chicago's western suburbs.</span></strong><br />
<strong><span style="font-size: x-small;">Notice the angles and curves. The appraisal inspection took 3 hours and it</span></strong><br />
<strong><span style="font-size: x-small;">took me about 1.5 hours to convert this sketch into my sketching program.</span></strong></td></tr>
</tbody></table><div class="separator" style="clear: both; text-align: center;"><strong><u>SIMPLE SKETCH</u></strong></div><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEirWjyAv0Nqe-lOJWFtyOY1ku7c6LmKTqtmcE9NVK0wDx8vngmirUVwJrmmp7uQRePOXFcKyndA94kgXVRF6-jHj1jMyArA5s22XAGbRKcSiGQFPyUBUUDCGNykdzFRl17Codu6/s1600/Simple+Sketch.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" ox="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEirWjyAv0Nqe-lOJWFtyOY1ku7c6LmKTqtmcE9NVK0wDx8vngmirUVwJrmmp7uQRePOXFcKyndA94kgXVRF6-jHj1jMyArA5s22XAGbRKcSiGQFPyUBUUDCGNykdzFRl17Codu6/s320/Simple+Sketch.png" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><strong><span style="font-size: x-small;">This is a sample of a simple sketch - </span></strong><br />
<strong><span style="font-size: x-small;">mostly a "box" to measure with 3 bay windows.</span></strong></td></tr>
</tbody></table><br />
<strong>WHY DOES ACCURATE SQUARE FOOTAGE MATTER?</strong><br />
<br />
I recently completed an appraisal in Naperville, IL. The home’s value is $525,000 and my actual measured square footage is 3,769 square feet. The Assessor reports the home is 3,363 square feet. The Agent is advertising 3,980 square feet based on an unidentified source. This is not at all an uncommon scenario.<br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivThxL2EdORFxSIfUCcE_XAs-k2T1myoIaJJWYw9ztcHif6DvBrEhjB0fF_YXbUWJCxg8CfHLJTr9tIdsYVUlNoQsuX7yR8Tik7-YkT8l3PcCh54cr22p3aa_ZYW3KjsdTmcun/s1600/house.png" imageanchor="1" style="clear: left; cssfloat: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="150" ox="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivThxL2EdORFxSIfUCcE_XAs-k2T1myoIaJJWYw9ztcHif6DvBrEhjB0fF_YXbUWJCxg8CfHLJTr9tIdsYVUlNoQsuX7yR8Tik7-YkT8l3PcCh54cr22p3aa_ZYW3KjsdTmcun/s200/house.png" width="200" /></a></div>Under this scenario, the cost per square foot of the home varies:<br />
<br />
• Appraiser: $525,000/3,769 sq.ft. = $139.29 per square foot<br />
<br />
• Assessor: $525,000/3,336 sq.ft. = $157.34 per square foot<br />
<br />
• Agent: $525,000 / 3,998 sq.ft. = $131.98 per square foot<br />
<br />
<br />
<br />
Considering this real life scenario, if I were appraising another home that had 3,400 square feet, the value (based on cost per square foot only) would range between $448,732 and $534,956. That is a $86,224 difference. <em>If this was your home, and you were getting ready to sell it, would this $86,224 matter to you? <strong>Absolutely!</strong></em><br />
<br />
<br />
<span style="font-family: Verdana, sans-serif;"><strong>NEW RULES FOR MRED, INC. INPUT OF MLS LISTINGS</strong></span><br />
<span style="font-family: Verdana, sans-serif;"><br />
<span style="font-size: x-small;"></span></span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">• <span style="color: blue;">Approximate Square Footage</span> – (Detached, Attached & Residential Rental)</span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">o Has been modified to be a required field</span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">o “0” entry is allowed and will not incur a fine</span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">o All blank entries currently in the Approx SF field have been converted to “0”</span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">o For searching on Approx SF, a checkbox “Include “0” matches” is displayed beside the search field</span><br />
<span style="font-family: Verdana, sans-serif;"><br />
<span style="font-size: x-small;"></span></span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">o Note: If you measure the Square Footage (Square Feet Source=Taped) MRED recommends that you enter the Gross Living Area – GLA - in the Approximate Square Footage field, which is defined as: finished space that is above grade only. Per the American Measurement Standard - In single-family detached dwellings, “finished” square footage is defined as the sum of all connected, finished, usable, areas; measured by exterior dimensions (walls). Each level is counted individually and any above grade space is combined to provide one total square footage number. Treat attached dwellings the same as detached dwellings, with the only difference being the addition for exterior measurements when a common wall is present. When in doubt always check with your broker for guidance and instruction.</span><br />
<span style="font-family: Verdana, sans-serif;"><br />
<span style="font-size: x-small;"></span></span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">• <span style="color: blue;">Square Feet Source</span> – (Detached, Attached & Residential Rental)</span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">o New required tabled field with the following codes: </span><br />
<span style="font-family: Verdana, sans-serif;"><br />
<span style="font-size: x-small;"></span></span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">A-Appraiser</span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">B-Assessor</span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">C-Builder</span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">D-Estimated</span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">E-Landlord/Tenant/Seller</span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">F-Other</span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">G-Plans </span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">H-Survey</span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">I-Taped </span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">J-Not Reported</span><br />
<span style="font-family: Verdana, sans-serif;"><br />
<span style="font-size: x-small;"></span></span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">o Existing listings with “0” in ASF field automatically have J-Not Reported assigned in this field</span><br />
<span style="font-family: Verdana, sans-serif; font-size: x-small;">o Where “0” is added in ASF, only J-Not Reported will be allowed to be saved in this field</span><br />
<br />
<span style="font-size: x-small;">A. L. Wagner Appraisal Group, Inc. is proud to have been serving the Chicago metropolitan area since 1970 by its founder Alvin Wagner Jr. Currently lead by his son Alvin III, known as “Chip,” we specialize in corporate relocation appraisals and complete residential appraisals for all purposes including lending, REO/Foreclosure, Legal (divorce, estates, trusts, litigation support), market value appraisals for Realtors and individuals for both listing and selling purposes. Visit www.WagnerAppraisal.com for more information on our qualifications and services. Thank you for your referrals!</span><br />
<span style="font-size: x-small;"><br />
</span><br />
<span style="font-size: x-small;">You may contact us at (630) 416-6556 or via e-mail at: Chip@WagnerAppraisal.com. All information contained in this Blog was created by Alvin L. “Chip” Wagner III, SRA, SCRP and is the opinion of the author. </span><br />
<br />
<span style="font-size: x-small;">Chip Wagner can provide professional service to calculate the Square Footage of a residential dwelling. Over 10,000 homes have been personally measured by Chip throughout his career. Chip uses a Leica Disto Laser Meter to measure homes, which is a device accurate to the nearest 1/16 of an inch with a range of 650'. The results are calculated in APEX IV Professional Sketching Software and certified by Chip Wagner. Call for a quote for service. Our fee will be quoted based upon the estimated time and complexity, including travel distance. Volume discounts may apply.</span><br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikh208zIdtrAuFJ3ntHwQMcErvIIAUqoUrQE4KHV1MKY5hdO5YnoiiOppkjAjPt4sRvD1fpj0Yzg1Yz9jBIvB72HKTgR2mIFUPR_0RR18xX3nq11c4qRGxg7XPkKGiyuvi00hK/s1600/Disto3.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="207" ox="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikh208zIdtrAuFJ3ntHwQMcErvIIAUqoUrQE4KHV1MKY5hdO5YnoiiOppkjAjPt4sRvD1fpj0Yzg1Yz9jBIvB72HKTgR2mIFUPR_0RR18xX3nq11c4qRGxg7XPkKGiyuvi00hK/s400/Disto3.png" width="400" /></a></div>Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com2tag:blogger.com,1999:blog-11259187.post-739231577002401422010-07-31T12:28:00.000-05:002010-07-31T12:28:05.591-05:00July 2010 Chicagoland Market StatisticsThe Quarterly Report shows the community statistics for total active listings, total under contract, sales volume over the past 12 months and the resulting MSI (Months Supply of Inventory). It also reports the Mean Sales Price. In the far right column shows the MSI and Mean Sales Price for the same period one year ago with the percent of change. In this eNewsletter, I am sharing the trended information for the entire Chicagoland region for each category in the Quarterly Report since 2005 (at our market’s peak). <br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhd6wqHlnbLbJcnAqWHkJtwN3lTT3GCeodRe5ZBV3eWIuLG9Ck6bJRV2LoMOCdnHdygTSD1YG9qmhz-ITNzXzBnSknOM-Xx8TV8i6NrR5X4wcFUb6tE5bFcyb9OWG9GfqixKR1q/s1600/Chicagoland+July+2010+Actives.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" bx="true" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhd6wqHlnbLbJcnAqWHkJtwN3lTT3GCeodRe5ZBV3eWIuLG9Ck6bJRV2LoMOCdnHdygTSD1YG9qmhz-ITNzXzBnSknOM-Xx8TV8i6NrR5X4wcFUb6tE5bFcyb9OWG9GfqixKR1q/s640/Chicagoland+July+2010+Actives.png" width="640" /></a></div><br />
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The graph above shows the increasing trend in the number of active listings in the Chicago region that peaked in 2008, and has been declining. Fewer active listings help to decrease the supply of inventory.<br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJz4Gjk_mTkbco1ddFc-eAkuATDZ4eNk0Kak-PmSzjNiVjw0sWWDB3tDjI6vWMEPW3cfHbpi35ks2yt5QSf0o2l0gtTL3fVzaXPVcKGSUecS2zApChIj7rPDWQyzphRrT1Utvy/s1600/Chicagoland+July+2010+Pending.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" bx="true" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJz4Gjk_mTkbco1ddFc-eAkuATDZ4eNk0Kak-PmSzjNiVjw0sWWDB3tDjI6vWMEPW3cfHbpi35ks2yt5QSf0o2l0gtTL3fVzaXPVcKGSUecS2zApChIj7rPDWQyzphRrT1Utvy/s640/Chicagoland+July+2010+Pending.png" width="640" /></a></div><br />
The graph above shows the increasing trend in the number of contract pendings in the Chicago region that peaked at a low in the first quarter of 2009, and has steadily increased since then. The 2010 totals are the highest they have been since 2006, and the continued increase in contract pendings is a good sign of continued sales activity. This has been in part the market’s reaction to the $6,500 and $8,000 tax incentives that expired on April 30th. This tax credit was to help spur activity, and it succeeded. <br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_5aKZrSpQyJTIeg87_n8RLmcHzjJJL3BFqlqC5qcm0aIErTvv5VpEXoVTmeIXmKB_asmMRrmq709_J6qoZccOSJ2JClzKz12wMqliqtmUHkOWVwe-f3iUVtcWiQWS0DtMnUUk/s1600/Chicagoland+July+2010+Sales.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" bx="true" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_5aKZrSpQyJTIeg87_n8RLmcHzjJJL3BFqlqC5qcm0aIErTvv5VpEXoVTmeIXmKB_asmMRrmq709_J6qoZccOSJ2JClzKz12wMqliqtmUHkOWVwe-f3iUVtcWiQWS0DtMnUUk/s640/Chicagoland+July+2010+Sales.png" width="640" /></a></div><br />
The graph above shows the increasing trend in the number of sales to take place in the Chicago region. This annualized stat shows the market bottomed in early 2009, and has been increasing ever since. From the end of 2005 to the beginning of 2009, the drop in sales volume was approximately 50%. Since fewer homes were selling, the inventory increased. The basic laws of Supply and Demand lead to the declining values our market has faced.<br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcTNjVmwMkjL2mXE8ji_SkkpAmo8NYtUgrXt2LnkJUYpOyFA3o9uex_Xp5-RXGx7_OiWrAG7-lqu_Qhzo6BsamtLe_Me_a5Apw6mhJVvHGE3Sz8hp_xkXYbpSsE0zWugDgwKGM/s1600/Chicagoland+July+2010+MSI.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" bx="true" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcTNjVmwMkjL2mXE8ji_SkkpAmo8NYtUgrXt2LnkJUYpOyFA3o9uex_Xp5-RXGx7_OiWrAG7-lqu_Qhzo6BsamtLe_Me_a5Apw6mhJVvHGE3Sz8hp_xkXYbpSsE0zWugDgwKGM/s640/Chicagoland+July+2010+MSI.png" width="640" /></a></div><br />
The graph above shows the first three quarters of each year, the MSI increased, and the fourth quarter it decreased and then returned to the same trend the following year. In 2009, the MSI actually began decreasing between the 2nd quarter and 3rd quarter. It has remained somewhat stable over the past 3 quarters. <br />
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The Months Supply of Inventory (MSI) is a calculation that measures the relationship between the number of active listings on the market as compared to the rate at which they are selling. <br />
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• Less than 3 months of supply will place strong pressure on prices upward, which could result in as high as double digit appreciation.<br />
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• 3 to 4 Months of supply will place pressure on prices upward, resulting in appreciating values.<br />
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• 5 to 6 Months of supply is generally considered a balanced market with little to no fluctuation in value.<br />
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• 7 to 8 Months supply is going to result in downward pressure on prices, usually leading to declining values.<br />
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• Over a 9 Month supply is an extreme oversupply, placing strong downward pressure on prices, potentially at a double digit annual rate.<br />
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The good news is the continued downward trend in the Inventory Levels.<br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhRQq_gxmGPOUgLUeKmz6dT8NYzNl45pmx2d3MAnOkfr_WY_r0iX0nvhcUYckCDB0l9qYTdzMZyWJZOuseC-14Wwv8hdJNjTi3XJoOaHuLVI3lhQLNlLkqfHx6adBtDm4c1zJHX/s1600/Chicagoland+July+2010+Mean.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" bx="true" height="372" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhRQq_gxmGPOUgLUeKmz6dT8NYzNl45pmx2d3MAnOkfr_WY_r0iX0nvhcUYckCDB0l9qYTdzMZyWJZOuseC-14Wwv8hdJNjTi3XJoOaHuLVI3lhQLNlLkqfHx6adBtDm4c1zJHX/s640/Chicagoland+July+2010+Mean.png" width="640" /></a></div>At the end of the first quarter, in my April eNewsletter, I reported that there was “Finally Something Positive to Say.” I discussed the statistics in the quarterly report had shown 41% of the communities analyzed in the report showed either increasing, or stable mean sales prices from the previous quarter. This was important because it is the first period since 2007 that shows areas with increasing prices from the previous quarter. But the overall Chicagoland average was still in decline.<br />
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At the end of the 2nd quarter of 2010, we see the first increase in Mean Sales Price since the middle of 2007. The graph above shows the Mean Sales Price as of the end of the 1st quarter to the end of the 2nd quarter increased 2.74%. This is after a 34% decrease over the previous 10 quarters. <br />
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And of the 186 suburban communities profiled in the Quarterly Report, 96 communities (48.9%) showed a positive increase or barely negligible change of less than ½ % downward. <br />
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There are continued concerns of the shadow inventory and the homes in pre-foreclosure and foreclosure that have not hit the market yet. It is difficult to measure the impact of this. The real concern is the economy and Unemployment. Once people have jobs, they can pay their mortgage. When they pay their mortgage, foreclosures go down. The following table shows local unemployment levels going back 10 years. Cook and DuPage Counties are seeing increasing levels, but the State and National averages are seeing a decline.<br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgaAJRBb2Xc_TjSTjQ-E7IdUzbbeQ-mTE4JONEEDG_bsxrL2MQawTIrR-UmmXZXW8j4n7i66S3e-db19S0JMVgtmT4tyn_blWGtO1WD4u7giDzCyAvoSRdZtjKrygU84HyE-bN2/s1600/Chicagoland+July+2010+Unemployment.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" bx="true" height="362" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgaAJRBb2Xc_TjSTjQ-E7IdUzbbeQ-mTE4JONEEDG_bsxrL2MQawTIrR-UmmXZXW8j4n7i66S3e-db19S0JMVgtmT4tyn_blWGtO1WD4u7giDzCyAvoSRdZtjKrygU84HyE-bN2/s640/Chicagoland+July+2010+Unemployment.png" width="640" /></a></div>Thanks for your continued interest. I frequently post real estate and appraisal-related information on my Facebook page at: <a href="http://www.facebook.com/pages/Naperville-IL/AL-Wagner-Apprasial-Group/368919896256?v=wall">http://www.facebook.com/pages/Naperville-IL/AL-Wagner-Apprasial-Group/368919896256?v=wall</a>Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com0tag:blogger.com,1999:blog-11259187.post-11970556966627547182010-06-12T19:03:00.001-05:002010-06-12T19:05:09.533-05:00Appraisal Challenges: Straight from the Battlefield<em>The following was originally a reply to a blog on the Keeping Current Matters blog titled: </em><a href="http://kcmblog.com/2010/06/07/appraisal-a-true-evaluation-of-a-homes-wort/"><em>The Appraisal: A True Evaluation of a Home's Worth</em></a><em>? Steve Harney and the KCM Crew thought so highly of my response, they posted it on his blog as a lead story and it had over 1,100 hits in 36 hours.</em><br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSCeT_esUbhgBveR5JxCOx7X1BMjNc1zuCIrqHqyOS2401oJVIsthaXMcsO5KojfswXLR33raG-D6LnCRPgQcDXZN9KvNTNF2JLSE_oSu0WrDofZiJF1kNVxWiiD2UC9WAdPmL/s1600/Soldiers.jpg" imageanchor="1" style="clear: right; cssfloat: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="200" qu="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSCeT_esUbhgBveR5JxCOx7X1BMjNc1zuCIrqHqyOS2401oJVIsthaXMcsO5KojfswXLR33raG-D6LnCRPgQcDXZN9KvNTNF2JLSE_oSu0WrDofZiJF1kNVxWiiD2UC9WAdPmL/s200/Soldiers.jpg" width="133" /></a></div>There are many challenges facing the real estate industry today, and one of the biggest is the abundance of foreclosures and short sales proliferating the marketplace in many areas of our country.<br />
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I have been a professional residential real estate appraiser for mre than 20 in the Chicago area, and I have never seen a marketplace like I have over the past 2-3 years.<br />
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The first issue is the <a href="http://www.realtor.org/government_affairs/gapublic/gses_hvcc_announced">Home Valuation Code of Conduct (HVCC</a>), and the second issue is the marketplace itself. The HVCC has given the appraisal profession a major blow, and the most experienced of residential appraisers are leaving the industry. The intent and desire was to insulate appraisers from lender-pressure to direct values (push the numbers higher). The unintended result has allowed the additional layer of insulation (appraisal management companies) to seek appraisal services from appraisers willing to do the work for appraisal fees of 25% to 75% less than our fees before the HVCC was enacted in May 2009. In many cases, the quality appraisers have diversified away from the business, and this in turn is leading to less-experienced appraisers trying to survive in the most complex real estate market anyone has seen since our Great Depression. Geographic competency has become a major issue as out-of-area appraisers are going into areas they have never been to for the work.<br />
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The HVCC has caused me to completely diversify my appraisal business away from doing lending appraisals into better appraisal work where my clients truly do want to know the value of the property. (Relocation, attorneys, and other private parties for litigation, divorce, estates, trust, tax appeal, etc.)<br />
The appraiser analyzes and interprets the market, and is an unbiased disinterested third party giving an opinion of “Market Value.” What the lender decides after receiving the appraisal report is one of the issues out there as well.<br />
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What the bank elects to do as far as making a loan is a completely different scenario. I have a relative who attempted to purchase a condominium in Florida this Spring with over 35% down, FICO scores in the high 700’s, an appraisal over $40,000 higher than the negotiated purchase price, yet two lenders (not one, but two) who approved the pre-qualification of the borrower would not make a loan on the property.<br />
I know of another scenario where a close family friend attempted to refinance, the appraisal came back $25,000 higher than he needed to qualify, but the lender and their underwriter decided to do a desk-top review and lowered the value $50,000 below the appraised value.<br />
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My daily challenge is finding “good comparables” and in many cases, they don’t exist. The marketplace is proliferated with data of distressed sales. The definition of value in a foreclosure or short sale is going to be “Liquidation Value” – not “Market Value.” So it is indeed unfair to use comparables that sold at liquidation value in a property where market value is supposed to be estimated by the appraiser.<br />
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But what has happened, in some markets, the only homes selling are the distressed sales. This creates the new “norm.” The real estate principal of “Substitution” states that when several similar or commensurate commodities, goods, or services are available, the one with the lowest price will attract the greatest demand and widest distribution. This is the primary principle upon which the sales comparison approach is based. If competing properties are priced at $179,900, why would you pay $200,000? Food for thought.<br />
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Another concern is that as our real estate market bottoms out, and prices begin to appreciate or increase again which they are in some areas of the country, we are going to have a data pool of comparable properties supporting lower values. Really a <em>catch-22</em> situation.Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com0tag:blogger.com,1999:blog-11259187.post-814154199964165232010-06-08T06:43:00.000-05:002010-06-08T06:46:03.319-05:00What is a Two-Flat?Recently, I was asked to explain to a client in a different part of the country what a “two flat” was. No, it is not something you might find on your car the next morning after driving over broken glass. And it is not a musical reference (as in sharps and flat notes).<br />
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If you Google the term, a <a href="http://www.suntimes.com/chicago/chicagopedia/406116,CST-NWS-pedia30.article">Chicago Sun Times definition</a> states: “<strong>two-flat</strong> / too flat / n. A residential, two-story brick building with a common front entrance and separate residences on each floor. One floor is often reserved, reluctantly, for mother-in-law. Common source of extra income/aggravation for Chicagoans.”<br />
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In Chicago, we call residences with two units on one property a two-flat. In most other parts of the country, they are called 2-unit apartment buildings. <br />
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Typically, one of the two units is occupied by the owner of the property, and the other unit rented out (or used by a family member, hence the “in-law” apartment term). Often times, they are owned as an investment property, therefore not owner-occupied.<br />
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There are many things to consider with this type of property. First and foremost – is zoning allowable for multiple-family residences? Most communities with have zoning codes, and the zoning must allow for multiple-family residences. Occasionally, non-compliance to the zoning code may be “grandfathered” for the property’s type/use. In some areas, particularly once and/or currently depressed areas, lax enforcement of zoning has lead to illegal zoning situations. As a neighborhood goes through the revitalization part of gentrification, the illegal use becomes a grandfathered use.<br />
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There are three types of 2-unit residences that I can describe. Vintage 2-flats, Converted 2-flats, and <span class="goog-spellcheck-word" style="background: #ffffff;">Duplexed</span> residences. In the spirit of "a picture tells a 1,000 words," I have included some examples below.<br />
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<strong>VINTAGE TWO-FLAT</strong><br />
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One of the most important things to note is that this property was originally designed and built to be a two-unit building, usually one unit above the other. They often have the same exact floor plan, room and bath count, size, and two separate entrances. I saw a lot of these built in Chicago between 1900 and 1940. My grandfather and granduncle built many of these residences on the South Side of Chicago in the early part of the 1900’s. <br />
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Note the pictures below shows the steps up to the door, which show two separate entrances – one to the upper level and one to the main level. There is a lower basement level, and this is often called the “garden” apartment, and an illegal 3rd unit in a 2-flat building. Other times, the basement area has the <span class="goog-spellcheck-word" style="background: #ffffff;">mechanicals</span> (furnace, boiler, hot water heater, etc.) for both units and a storage area and common laundry area. These are very common in older Chicago neighborhoods. During the 1990's and 2000's, many of these original 2-flat buildings have been converted to condominium units. This was at a point where the "<a href="http://en.wikipedia.org/wiki/Highest_and_best_use">highest and best use</a>" of the unit changed because there was more demand and more valuable as individual condominium units than there was as an apartment.<br />
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<strong>CONVERTED TWO-FLAT</strong><br />
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Another type is an older single-family residence that was converted at some point to a two-unit residence. The original use of the property when built 100 years ago was a single family residence, but at some point in the property’s history, the use of the property was converted to an “in-law” apartment, or a “rental” apartment by converting the <span style="background-color: white;"><span class="goog-spellcheck-word" style="background-attachment: scroll; background-image: none; background-position: 0% 0%; background-repeat: repeat;">floorplan</span>,</span> securing a separate entrance, etc. Typically the original first floor was redesigned with bedrooms and a hall bath, and the original second floor with bedrooms reconfigured and adding a living room and a kitchen. Note the properties below, and most have two different front doors entrances – one leading to the main floor, the other to a staircase to the upper level unit. There could be a common front door, leading to secure doors leading to each unit in the entrance.<br />
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As these properties were originally built as a 1-family home, at some point in history, the highest and best use changed, likely because of the change in the neighborhood and/or economic conditions. Maybe the area was affluent when the properties were built, but change or deterioration in the declining neighborhood caused the "<a href="http://en.wikipedia.org/wiki/Highest_and_best_use">highest and best use</a>" to be as an income producing property. This was common in established neighborhoods during the <a href="http://en.wikipedia.org/wiki/Great_Depression_in_the_United_States">Great Depression</a>.<br />
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<strong>DUPLEXES</strong><br />
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The third type of 2-unit residence is a duplex property, and typically that is a two-family residence on one parcel of land and it is side by side. There is one tax bill, and the property owner owns both units. Again, one is often occupied by the owner who rents out the adjoining unit. Sometimes they are mirror image of each other, other times they are not. See examples below. <br />
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These residences were more commonly built in the 1960's and beyond. Sometimes, these units are deeded separately, with the land split down the middle of the residence, and then we refer to them as a half-duplex.<br />
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A picture tells a 1,000 words.Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com26tag:blogger.com,1999:blog-11259187.post-61856764360811816392010-06-05T12:04:00.000-05:002010-06-05T12:04:44.684-05:00Chicago's Real Estate MarketThere was a great deal of hoop-la surrounding the end of the tax credit on April 30. If you had a contract dated by April 30, 2010, and you qualified, you could earn a $8,000 tax credit as a first time home buyer, or a $6,500 tax credit for existing homeowners who were moving up. This was the government's attempt to spur the real estate markets, and it did work. All of my statistics indicated the decline in sales volume stopped by the end of 2009 and began increasing again. The real worry was what will happen after the tax credit expires on April 30.<br />
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Well, the good news is that as of today, June 5, 2010, about 36 days after the tax credit program expired, there has been 4,247 new contracts accepted for detached single-family homes in the Chicago market area, and there has been an additional 1,941 contracts accepted for attached single-family homes.<br />
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It is expected that with our Spring market in place, that the pace of real estate would continue, but the concern was at what rate. It is clear now that our market continues on!Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com2tag:blogger.com,1999:blog-11259187.post-40364365759699839082010-05-05T13:36:00.000-05:002010-05-05T13:37:33.471-05:00CHICAGOLAND CONTRACT CONTINUE!<span style="background-color: white;">Since the middle of 2009, home buyers have had the opportunity to take advantage of a $8,000 tax credit for new home-buyers, and a $6,500 tax credit for move-up buyers. This, combined with very favorable interest rates have lead to a dramatic increase in the volume of sales, helping to tackle the inventory that built up since 2006 in our market area.</span><br />
<span style="background-color: white;"><br />
</span><br />
<span style="background-color: white;">One of the biggest concerns I have heard amongst my friends in real estate is <em><strong>"What is going to happen after the tax credit expires on April 30th?"</strong></em> We have all said, "we will have to wait and see what happens."</span><br />
<span style="background-color: white;"><br />
</span><br />
<span style="background-color: white;">If the activity over the past 5 days is any indication, we have some great news to report in the <span class="goog-spellcheck-word" style="background-attachment: scroll; background-image: none; background-position: 0% 0%; background-repeat: repeat;">Chicagoland</span> marketplace.</span><br />
<span style="background-color: white;"><br />
</span><br />
<span style="background-color: white;">According to the <span class="goog-spellcheck-word" style="background-attachment: scroll; background-image: none; background-position: 0% 0%; background-repeat: repeat;">MRED</span>, <span class="goog-spellcheck-word" style="background-attachment: scroll; background-image: none; background-position: 0% 0%; background-repeat: repeat;">LLC</span> multiple listing service, as of 1:30 p.m. on May 5, 2010, there are 362 attached homes that have a contract written since 5/1/2010 (attached homes include condos, <span class="goog-spellcheck-word" style="background-attachment: scroll; background-image: none; background-position: 0% 0%; background-repeat: repeat;">townhomes</span>, co-ops, and duplexes). And there has been 636 detached homes that have had a contract written since 5/1/2010. </span><br />
<span style="background-color: white;"><br />
</span><br />
<span style="background-color: white;">That totals 998 new residential contracts since 5/1/2010, or since our tax credit expired on 4/30/2010.</span><br />
<span style="background-color: white;"><br />
</span><br />
<span style="background-color: white;">This is great news - our real estate market, while it has a long way to go, continues to show improvement.</span><br />
<span style="background-color: white;"><br />
</span><br />
<span style="background-color: white;">CHIP WAGNER, <span class="goog-spellcheck-word" style="background-attachment: scroll; background-image: none; background-position: 0% 0%; background-repeat: repeat;">SRA</span>, <span class="goog-spellcheck-word" style="background-attachment: scroll; background-image: none; background-position: 0% 0%; background-repeat: repeat;">SCRP</span></span><br />
<span style="background-color: white;">President, A.L. Wagner Appraisal Group, Inc</span><br />
<a href="mailto:chip@wagnerappraisal.com"><span style="background-color: white;">chip@<span class="goog-spellcheck-word" style="background-attachment: scroll; background-image: none; background-position: 0% 0%; background-repeat: repeat;">wagnerappraisal</span>.com</span></a>Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com0tag:blogger.com,1999:blog-11259187.post-3713560170833462452010-04-08T20:51:00.000-05:002010-04-08T20:51:30.498-05:00FINALLY, SOMETHING POSITIVE TO SAY!The first quarter statistics are hot off the press. The Wagner Report’s First Quarterly Report of 2010 is now available, and will be released very shortly. <br />
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Typically, I release the statistics that feature the year over year change in Months Supply and Mean Sales Price. This quarter, there is some exciting news, so instead of the year to date change, I have compiled the quarter to quarter change. This shows the Mean Sales Price as of 1/1/10, and comparing it to 4/1/10. <br />
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Of the 186 suburban communities profiled, 49 areas (26.3%) showed a positive increase and another 27 communities (14.5%) showed a barely negligible change of less than 1% downward. This is good news because since the end of 2007, every community has seen declining values through the end of 2009. This is the very first evidence that we have seen where values have reversed the negative downward trend and are now moving in a positive direction.<br />
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<strong>Chicago Area suburbs that have shown an increase from the previous quarter to the current quarter include: (shown in alphabetical order)</strong> <br />
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Algonquin; Alsip; Barrington Area; Beecher; Bloomingdale; Blue Island; Burr Ridge; Calumet Park; Clarendon Hills; Deerfield; Elmhurst; Evanston; Fox Lake; Glen Ellyn; Glenwood; Gurnee; Harvey; Hazel Crest; Hickory Hills; Hinsdale; Hoffman Estates; Homer Glen; Kenilworth; Lake in the Hills; Lincolnshire; Lombard; Lynwood; Lyons; Markham; Mokena; Monee; Norridge; Oak Lawn; Oak Park; Oswego; Palatine; Park Ridge; Riverside; Schaumburg; St. Charles; Steger; Sugar Grove; Thornton; Tinley Park; Vernon Hills; Warrenville; West Chicago; Westchester; and Willow Springs.<br />
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As you can see, there is not a specific region or price range that is doing better than others. The positive trend has been seen in higher priced communities like Barrington Area, Burr Ridge, Hinsdale, Kenilworth, and Lincolnshire, as well as modest priced areas including Alsip, Beecher, Blue Island, Harvey, Hazel Crest, Markham, Steger and Thornton. It includes samples from the Northern, Northwestern, Western, Southwestern and Southern Suburban areas.<br />
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<strong>These following Chicago-Area suburbs showed a barely negligible drop (between 0% and 0.9%) from the previous quarter to the current quarter (shown in alphabetical order): </strong><br />
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Addison; Antioch; Arlington Heights; Brookfield; Calumet City; Carol Stream; Cicero; Darien; Geneva; Highland Park; Hillside; Homewood; Itasca; LaGrange Park; Midlothian; Mundelein; Naperville; Olympia Fields; Orland Park; Palos Hills; Richton Park; Shorewood; Streamwood; University Park; Villa Park; Wood Dale; and Woodridge.<br />
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Unfortunately, 59.2% of the Chicago-Area suburbs continued to see a decline of greater than one percent over the previous quarter to the current quarter. The entire region, including the City of Chicago, saw a total change of -0.67%<br />
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This is a welcome trend that will continue to be monitored closely. The hope is this positive news will continue and spread to other communities as we move through 2010.Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com1tag:blogger.com,1999:blog-11259187.post-6433636530827983062010-03-21T22:26:00.000-05:002010-03-21T22:26:05.908-05:00Great News for Glen Ellyn!<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0-RNRE6LErcx6JMZOH9r6pHscQWEoT7wawJ-Ls71d7z57pOwJRH77LGnl8jb7BRgOmSRlDyyMlnmlo6AwjmJBAn8Gq8inUJnmu4-bQfxhdbg7ykNuEtNmHkasb0LRByfLvjqb/s1600-h/Glen+Ellyn.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0-RNRE6LErcx6JMZOH9r6pHscQWEoT7wawJ-Ls71d7z57pOwJRH77LGnl8jb7BRgOmSRlDyyMlnmlo6AwjmJBAn8Gq8inUJnmu4-bQfxhdbg7ykNuEtNmHkasb0LRByfLvjqb/s640/Glen+Ellyn.png" vt="true" width="640" /></a></div><br />
<div class="separator" style="clear: both; text-align: left;">According to the graph above, at the year end, Glen Ellyn's Mean Sales Price over the prior 12-month period was $403,515.</div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div style="text-align: left;">I'm working on a new appraisal today, and during the period between 3/20/2009 and 3/19/2010, the mean sales price is $416,416. </div><div style="text-align: left;"><br />
</div><div style="text-align: left;">This shows just about a 3% increase after almost 3 months into 2010. This follows a period after average sales prices in Glen Ellyn fell about 24.4% over the past 2 years. (From $534,053 down to $403,515).</div>Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com0tag:blogger.com,1999:blog-11259187.post-69800175855149119222010-03-21T17:31:00.000-05:002010-03-21T17:31:43.333-05:00Sugar Grove May Have Bottomed Out, Positive Trend Just Observed<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMrQ45Wn8e0NNayoJufPlI3Njmkfgq68pdqUsteoTgX8hb7QMttWSy0CeSkrEkrMOuE1cyc06V30szhEz7t95H0pW7LfBuRGIq-r629h0naa-emabKOyLXLDIVg4MVqAvZ5AX_/s1600-h/Sugar+Grove.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMrQ45Wn8e0NNayoJufPlI3Njmkfgq68pdqUsteoTgX8hb7QMttWSy0CeSkrEkrMOuE1cyc06V30szhEz7t95H0pW7LfBuRGIq-r629h0naa-emabKOyLXLDIVg4MVqAvZ5AX_/s640/Sugar+Grove.png" vt="true" width="640" /></a></div>According to the graph above, at the year end, Sugar Grove's Mean Sales Price over the prior 12-month period was $305,289.<br />
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I'm working on a new appraisal today, and during the period between 3/20/2009 and 3/19/2010, the mean sales price is $308,793. <br />
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This shows just about a 1% increase to start 2010. This is after average sales prices fell about 16% in 2009. Good news where ever we can find it!Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com0tag:blogger.com,1999:blog-11259187.post-10432384578740082842010-03-16T22:48:00.000-05:002010-03-16T22:48:41.631-05:00Hoffman Estates showing increasing values<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6P3Wty7iqQA1FQ0PkVOdA8zaWH0jvY9O9P3OWIhrT590NSFmbhZJO6YPY2HVA3LctvYCMrrd-pyoh3lb2O6BGYM6xyEgiEaUXPDsoKJXQVGiuOyq_sihu8OVpnXYhmA_qFZaB/s1600-h/Hoffman+Estates.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="379" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6P3Wty7iqQA1FQ0PkVOdA8zaWH0jvY9O9P3OWIhrT590NSFmbhZJO6YPY2HVA3LctvYCMrrd-pyoh3lb2O6BGYM6xyEgiEaUXPDsoKJXQVGiuOyq_sihu8OVpnXYhmA_qFZaB/s640/Hoffman+Estates.png" vt="true" width="640" /></a></div>It's time for some good news for my friends in the Northwest suburbs!<br />
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The graph above shows the annualized mean sales price by quarter for detached housing in the Village of Hoffman Estates, IL. It shows a downward trend after the market peaked at the end of 2007, with significant declines to follow over the next 8 quarters.<br />
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According to a current apprasial I am working on, in the 12 month period between 3/14/2009 and 3/14/2010, the average sales price in all of Hoffman Estates is $286,614. <br />
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As you can see, at the end of the year, for the period between 1/1/2009 and 12/31/2009, the mean sales price was $282,791. This represents an approximate 1.5% increase from the average sale price just 2.5 months ago. <br />
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I'm seeing this positive trend in about 50% of the areas that I am doing appraisals in right at this moment.Chip Wagnerhttp://www.blogger.com/profile/17693857286021881081noreply@blogger.com0