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In Memoriam: Jim McNairy, MAI, SRA

It is with great sadness that we report the passing of James (Jim) D. McNairy III, MAI, SRA of Greensboro, NC. Jim was a long standing and active member of the Appraisal institute, holding various leadership positions at the chapter and national levels. He was awarded the AI Volunteer of Distinction award for Region V in 2013. Jim served on the NC Chapter’s Executive Committee from 1996-2000 and was NC Chapter President in 2000. In addition, he served on a variety of national and chapter committees including AI’s Experience Screening Panel and the Piedmont Chapter’s Board of Directors in the early 1990’s. Jim and his wife, Jeanne McNairy, MAI, SRA, founded McNairy & Associates in 1978 to provide professional commercial and residential appraisal and consulting services in North Carolina.  

Arrangements are being handled by the Forbis and Dick Funeral Home. Our deepest sympathies go out to Jim’s family.

FHFA Seeks Input on Appraisal Policies, Practices and Processes

The Federal Housing Finance Agency (FHFA) issued a Request for Input (RFI) on appraisal-related policies, practices, and processes. The input received in response to the RFI will be used by FHFA to determine the necessary modifications needed to ensure Fannie Mae and Freddie Mac (the Enterprises) operate in a safe and sound manner.

“Modernizing the appraisal process has the potential to create a more streamlined and accurate collateral valuation process. But if modernization is not properly adopted, it could have negative unintended consequences," said Director Mark Calabria. “Today's RFI will improve FHFA's understanding of how the Enterprises can improve the appraisal process while at the same time ensuring they don't take on unintended or inappropriate levels of risk. The comments we receive will inform how we will modernize appraisals to improve both loan quality and the origination process."

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Mortgage Rates Stay at Record Lows Even as Treasury Yields Increase: Freddie Mac

Freddie Mac released the results of its Primary Mortgage Market Survey (PMMS), showing that the 30-year fixed-rate mortgage (FRM) averaged 2.71 percent.

“Mortgage rates remain at record lows, resisting their typical correlation to Treasury yields, which have recently been moving higher,” said Sam Khater, Freddie Mac’s Chief Economist. “Mortgage spreads – the difference between mortgage rates and the 10-year Treasury rate – are declining from their elevated levels earlier this year. Although today’s mortgage spread is about 1.8 percentage points and still has some room to move down if the 10-year Treasury continues to rise, it’s encouraging to see that the spread is almost back to normal levels.”

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Homebuying Sentiment Declines After 3 Months of Growth, Fannie Mae Reports

The Fannie Mae (FNMA/OTCQB) Home Purchase Sentiment Index® (HPSI) fell 1.7 points in November to 80.0, the first decline after three consecutive months of increases. Three of the six HPSI components decreased month over month, with consumers reporting a more pessimistic view of homebuying conditions, including mortgage rate expectations, but a more optimistic view of home-selling conditions and home prices. Moreover, consumers also reported mixed results regarding job loss concerns and household income changes. Year over year, the HPSI is down 11.5 points.

"The HPSI appears to have peaked for now as consumers continue to consider how COVID-19 impacts their ability to buy or sell a home," said Doug Duncan, Senior Vice President and Chief Economist. "This follows the HPSI's recovery of slightly more than half of the loss experienced during the first few months of the pandemic."

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Foreclosures Fall 14% in November, Down 80% from 2019, Data Shows

ATTOM Data Solutions, licensor of the nation’s most comprehensive foreclosure data and parent company to RealtyTrac (www.realtytrac.com), a foreclosure listings portal, released its November 2020 U.S. Foreclosure Market Report, which shows there were a total of 10,042 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — in November 2020, down 14 percent from a month ago and down 80 percent from a year ago.

“It’s not unusual to see foreclosure activity slow down beginning in November and through the holiday season,” said Rick Sharga, executive vice president at RealtyTrac, an ATTOM Data Solutions company. “Both foreclosure starts and repossessions were down about 80% on a year-over-year basis, but it might be worth noting that a few cities that may be vulnerable to the pandemic-driven flight from urban areas to the suburbs – like New York City, Chicago, and Miami – were among the markets with the highest levels of foreclosure actions.”

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US Housing Market Will Withstand Foreclosure Wave When Forbearance Ends: Redfin

The U.S. housing market will likely withstand a wave of foreclosures as investors and first-time homebuyers purchase these homes, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. This analysis was conducted by Redfin Chief Economist Daryl Fairweather.

More than 3.3. million of U.S. homeowners will be on the hook for delinquent payments when mortgage forbearance ends. While some of those homeowners who are overleveraged or unaware of their options will contribute to a wave of foreclosures, most will be able to work with their lenders to either refinance their mortgage or sell to cash in on rising home values.

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Survey Reveals Continued Challenges for Commercial Real Estate Sector: Deloitte

By Jim Berry and Kathy Feucht

The impact of COVID-19 on the global economy and the CRE industry has made 2020 the most memorable year in recent history. CRE companies have needed to digitize operations, close physical facilities due to extensive lockdowns, and prepare for reopening, while ensuring the health and safety of employees and occupiers and considering the financial health of tenants and end users.

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Nearly Half of Office Tenants Likely to Reduce Square Footage, BOMA Survey Reveals

By David Kitai

A study of the COVID-19 pandemic’s impact on commercial real estate, commissioned by the Building Owners and Managers Association International (BOMA), has found that office users face widespread economic challenges but many remain convinced that in-person workspaces are crucial to their operations. They noted, as well, that landlords and property managers have successfully adapted to new needs during the pandemic.

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‘Appraisal Issues’ Cited as a Problem in October: NAR

The appraisal can be a stressful process and may threaten to derail transactions. Twenty-one percent of REALTORS® say “appraisal issues” delayed their sales contracts in October, according to the most recent REALTORS® Confidence Index. Appraisal issues led to 13% of contracts being terminated. The appraiser evaluates the home’s lot size, condition (both inside and out), foundation, neighborhood, and any other amenities that add or decrease value.

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Welcome New NCAI Members

We’d like to welcome to our newest members who joined in Q4.

  • Charles Andrew Alvarez, Jr.
  • Zackery Todd Barbee
  • Mark R Boone
  • Michael Oktavec
  • William S. Overton, MAI
  • Philip Graham Pruette

Engage with the Chapter in 2021

Check out our committee webpage for more information about what committees are available and the interest form. In particular, the Chapter is seeking a volunteer to be the 2021 PAC Treasurer. Another way to get involved to is participate in our Sponsorship Program to gain year-round visibility while championing the industry in North Carolina.

Q4 Chapter Business Meeting Recap

This past Thursday, members and guests virtually attended the 2020 Q4 Chapter Business Meeting and Installation Ceremony. We celebrated our newly designated members (Chesney S. Baker, MAI, SRA, AI-GRS; Brian T. Bryant, MAI, AI-GRS; Nirzarni A. Coston, MAI; and William S. Overton, MAI), heard committee updates on how we ended the year, Chris Johnson, MAI, SRA, AI-GRS, ASA gave his final address as the 2020 President, and the 2021 officers were installed, including 2021 President, Mike Moody, MAI.

 

FHA Increases 2021 Loan Limits for Both High-cost Areas and Reverse Mortgages

The Federal Housing Administration on Dec. 2 announced that for 2021 its loan limit for high-cost areas and for Home Equity Conversion Mortgages for reverse mortgages will increase from $765,600 to $822,375, and the floor from $331,760 to $356,362. Current FHA regulations don’t allow HECM loans to vary by metropolitan statistical area or county.

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Fannie, Freddie Need "Significant Capital" to Exit Conservatorship, Mnuchin Says

Treasury Secretary Steven Mnuchin told the House Financial Services Committee Dec. 2 that Fannie Mae and Freddie Mac need “significant capital” to get out of conservatorship, but noted that no definitive plans have been made for the government-sponsored enterprises, HousingWire reported. The Federal Housing Finance Agency plans to stay its course even with the incoming Biden presidency.

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AI Answers: A Walk Through “The Appraisal of Real Estate,” 15th Edition

AI Answers, with Jeff Sherman, Steve Roach, Leslie Sellers, and Bill Garber, spotlights the newly released “The Appraisal of Real Estate,” 15th edition, a peer-reviewed Appraisal Institute text and an authoritative source of recognized methods and techniques for valuation practitioners.  

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COVID-19 Vaccine Could Increase Mortgage Rates and Housing Inventory: Economists

By Jacob Passy

When the coronavirus pandemic first reached U.S. shores earlier this year, worries abounded about how it would affect the country’s housing market.

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Home Prices in Opportunity Zones Rise at Slower Pace than National Average: Data

 ATTOM Data Solutions, curator of the nation’s premier property database and first property data provider of Data-as-a-Service (DaaS), today released its third-quarter 2020 special report analyzing qualified Opportunity Zones established by Congress in the Tax Cuts and Jobs act of 2017 (see full methodology below). In this report, ATTOM looked at 1,737 zones with sufficient sales data to analyze, meaning they had at least five home sales in the third quarter of 2020.

The report found that median home prices increased from the third quarter of 2019 to the third quarter of 2020 in 74 percent of the zones and rose by more than 10 percent in slightly more than half the zones.

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Single-family Home Prices Up in All Metros During Q3: NAR

Every metro area tracked by the National Association of Realtors® during the third quarter of 2020 saw home prices increase from a year ago, according to NAR’s latest quarterly report, released today.

Due in large part to record-low mortgage rates and depleted nationwide housing inventory, median single-family home prices grew year-over-year in all 181 metropolitan statistical areas1 tracked by NAR, as every measured market showed sales price gains.

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Industrial Sector Shows Some Signs of Weakness: Moody’s

Moody’s Analytics today announced new forecasts for commercial real estate (CRE) rents and vacancies, covering eight property types and more than 3,000 submarkets across the United States. The forecasts reflect the latest Q3 data on US CRE markets collected and curated by the Moody's Analytics CRE Solutions group.

Throughout 2020, industrial properties such as warehouses used for storage and distribution of goods have likely benefited from an acceleration of e-commerce sales, even as brick-and-mortar retail floundered amid the coronavirus pandemic. The sector will likely not remain unscathed over the next year as a surge in COVID-19 cases forces further shutdowns and a fall in international trade volumes weighs on the manufacturing industry. Industrial property vacancy rates are expected to rise to 11.8% in 2021, and the sector is predicted to incur its biggest drop in effective rents in 10 years, down 4.5% in 2021.

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AI Board of Directors Approves 45-Day Notice Item on Agenda During November Meeting

The Appraisal Institute Board of Directors adopted one 45-Day Notice item on its agenda during its Nov.12-13 meeting, which was conducted via videoconference due to the coronavirus pandemic.
 
The Board adopted the proposed amendments to the Appraisal Institute Bylaws concerning the Audit Committee as set forth in the 45-Day Notice distributed to Designated Members, Candidates, Practicing Affiliates and Affiliates on Sept. 28. 
 
The Board also directed that the 45-Day Notice of proposed amendments to the Code of Professional Ethics be referred back to the Professional Standards and Guidance Committee for further study.
 
The Board also:
  • Adopted a strategic framework for the advancement of enhancements to the Appraisal Institute’s affiliation model.
  • Directed staff to develop a messaging and communications plan to be launched to communicate the enhancements to and value proposition of the Appraisal Institute’s affiliation model. 
  • Directed staff to investigate and report to the Board of Directors no later than the second regular 2021 Board meeting on the possibility of making Appraisal Institute books available both domestically and internationally through online subscription services and Print-on-Demand services.
  • Directed staff to investigate the cost and feasibility for “live-streaming” Non-Executive Session portions of virtual and in-person regularly scheduled Board of Directors meetings for AI Professionals, and for staff to report its findings to the Board at the first regular 2021 Board meeting.
  • Amended the temporary amendments to the Education Network Manual for chapter-sponsored synchronous programs.
  • Adopted the proposed 2021 budget.
  • Adopted the proposed Guide Note, “Compliance with the Code of Professional Ethics and Standards of Professional Practice of the Appraisal Institute,” as set forth in the Exposure Draft distributed to Designated Members, Candidates, Practicing Affiliates and Affiliates on Sept. 28 and as further modified by the PSGC.
  • Approved 2020 committee appointments.
The following Appraisal Institute Designated Members were elected to fill vacancies on the committees noted below:
  • Admissions and Designation Qualifications Committee: Stephen D. Roach, MAI, SRA, AI-GRS (Jan. 1, 2021 to Dec. 31, 2021 term).
  • International Relations Committee: Ernst. Ulich H. Bergmann, MAI, SRA (Sept. 10, 2020 to Dec. 31, 2021 term).
  • Audit Committee:  Robert L. Moorman, MAI, SRA, AI-GRS beginning Nov. 13, 2020.  Moorman’s term will continue through Dec. 31, 2022.
  • Strategic Planning Committee Chair:  Robert R. Elliott, MAI, SRA (Nov. 13, 2020 to Dec. 31, 2021).
Additionally, the Appraisal Institute conducted its annual membership meeting in accordance with the Illinois General Not For Profit Corporation Act of 1986. President Jefferson L. Sherman MAI, AI-GRS; President-Elect Rodman Schley, MAI, SRA; Vice Pledger M. (Jody) Bishop III, MAI, SRA, AI-GRS; and Immediate Past President Stephen S. Wagner MAI, SRA, AI-GRS reported on their activities on behalf of the Appraisal Institute. CEO Jim Amorin, MAI, SRA, AI-GRS, reported on the activities of Appraisal Institute staff and Vice President Bishop presented the Finance Committee’s report.
 
The Board’s next meeting is scheduled for Feb. 24-26 via videoconference.