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Fannie Mae Housing Confidence Survey Shows Mixed Feelings on Residential Sector

The Fannie Mae (FNMA/OTCQB) Home Purchase Sentiment Index® (HPSI) increased 3.5 points in September to 81.0, rising for the second consecutive month and continuing the rebound from late spring. Three of the six HPSI components increased month over month, with consumers reporting a substantially more optimistic view of home-selling conditions, expected home price growth, and the labor market, but a more pessimistic view of homebuying conditions and mortgage rate expectations. Year over year, the HPSI is down 10.5 points.

“The HPSI has recovered more than half of the early pandemic-period decline, mirroring the strong home purchase activity of the past few months,” said Doug Duncan, Senior Vice President and Chief Economist. “Consumers’ home price expectations were up strongly this month, with high home prices playing an increasingly – though unsurprisingly – important role in driving both the increase in ‘good time to sell’ sentiment and the decline in ‘good time to buy’ sentiment. Going forward, we believe the wild card to be whether enough sellers enter the market to continue to meet the strong homebuying demand. The home purchase market requires the proper mix of home price growth and continued economic recovery to achieve sustainable levels of housing activity.”

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Appraisal Organizations Join Forces to Support Training, Ethics to Combat Bias

The Appraisal Institute, the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers and the Massachusetts Board of Real Estate Appraisers today announced their collective support for the development of additional training that addresses unconscious bias in valuation, and for each organization to individually review its Code of Ethics and other governing documents to further ensure awareness and compliance among its membership and the valuation profession as a whole.

“During this important time in our nation’s history, our organizations stand together to enhance existing training and ethics initiatives and work even harder to ensure that the appraisal process is free of bias or discrimination of any kind,” said Appraisal Institute President Jefferson L. Sherman, MAI, AI-GRS.

Specifically, the professional organizations pledge to develop training programs for appraisers covering unconscious bias issues, helping to increase awareness by connecting the appraisal community with thought leaders on bias and discrimination.

“Acknowledging that bias exists is but one small step. Together with our partners, we commit to doing the hard work of educating our members about the various ways bias can affect their work, and provide them the tools necessary to overcome bias. By doing this as a profession, and not merely as individual organizations, we hope to underscore to our members and the public just how important this issue is to all of us,” stated American Society of Appraisers International President Lorrie Beaumont, ASA.

Each of the organizations also commit to take steps to enhance their respective Code of Ethics to more firmly or overtly address bias and discrimination issues with protected classes.

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AI Education & Relief Foundation Application

The Appraisal Institute Education and Relief Foundation (AIERF) was born out of the 2018 union of the AI Education Trust and AI Relief Foundation in order to most effectively and efficiently serve real estate appraisal professionals now and into the future.


For more than 50 years, the Appraisal Institute Education Trust (AIET) fostered the advancement of the real estate appraisal profession and played a critical role in supporting valuation education. AIET supported a vast range of initiatives, from world-renowned resources such as the Y.T. and Louise Lee Lum Library, to programs that will help secure the future of the valuation industry, including research grants and scholarships.

Since the formation of the Appraisal Institute Relief Foundation (AIRF) following the 2005 Gulf Coast hurricanes, more than $300,000 in emergency financial assistance has been provided to appraisers and other individuals in need.

Looking to the future, the AI Education and Relief Foundation will continue to seek opportunities to support and promote the profession of real estate valuation and the individuals who comprise the profession.

If you or someone you know has experienced a disaster or emergency causing financial, physical, or emotional distress, please encourage them apply today




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Welcome New NCAI Members

We’d like to welcome to our newest members who joined in Q3.

  • Adam C. Watson
  • M. Oniel Jessup, III
  • Daniel S Ponce
  • Eric L. Randall
  • Heather L. Sutton
  • Nirzarni A. Coston, MAI
  • Jacob Quinton Palmer

Appraisal Institute Scholarship Deadlines on Thursday (10/1)

The Appraisal Institute Education and Relief Foundation offers scholarships for AI professionals pursuing designations and state certification. Specific offerings are available for minorities and women. Candidates for Designation and Practicing Affiliates should apply by the October 1 deadline.

The NCAI Scholarship Committee is available to answer any of your questions and guide you through the application process. Contact Scholarship Committee Chair Kelli Mayhew.

Apply Today

Appraisal Institute Seeks to Expand Diversity, Combat Alleged Bias in Valuation

As our nation continues reflecting on important matters of racial justice, the nation’s largest professional association of real estate appraisers today reiterated its efforts to expand opportunities for aspiring appraisers and help combat alleged bias in valuation.

The Appraisal Institute has several existing programs concentrating on this issue, including the Appraiser Diversity Pipeline Initiative with Fannie Mae and the National Urban League, along with the Minorities and Women Course Scholarship Program from the Appraisal Institute Education and Relief Foundation.

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New Appraisal Institute Textbook Addresses Time-tested Valuation Principles for Today’s World

In the midst of a global pandemic and social justice concerns, the Appraisal Institute published “The Appraisal of Real Estate,” 15th edition. The textbook long has been recognized as the valuation profession’s most comprehensive source of information for appraisers and other real estate professionals.

“We find ourselves in a situation much like 2008 today, with a global pandemic and social justice concerns affecting all areas of the economy—and many other aspects of daily life—in the United States and around the world,” Appraisal Institute President Jefferson L. Sherman, MAI, AI-GRS, wrote in the book’s foreword. “Today, appraisers and users of appraisal services do not know what the future will look like.”

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AI Seeks to Partner with TAF on Alleged Bias in Valuation

As you might have seen, two studies have been released in recent years that are gaining some attention in light of recent events in Minneapolis and elsewhere. The Brookings Institution conducted a study on racial wealth gaps attributable to valuation processes. It does not review appraisals, but uses Zillow and owner estimates of value to draw inferences about appraisal. Another report was published by the American Sociological Society, which interviews several field appraisers and takes issue with appraisal neighborhood/location adjustment processes.

The body of knowledge is well established and accepted. The appraisal process is rigorous, and we must defend it to the greatest extent possible. People (and appraisers) are not perfect. We can do more to reinforce existing requirements and to help illuminate important issues. That spirit is central to our Aug. 20 letter to TAF and to the actions we are taking to improve education and awareness.

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Recap: Healthcare Real Estate Sector Update

Our last NCAI Connect featured Gerald Quattlebaum with Flagship Healthcare Properties who presented a comprehensive look into the healthcare real estate sector. He discussed the development and acquisition of healthcare properties as well as Flagship’s private REIT which has managed to maintain stability in the current economic climate. Private equity increased their share of buying medical office buildings (MOBs) compared with hospital/health systems, provider owners, and REITs. Gerald discussed cap rate trends for on and off campus properties which are holding steady in 2020. Portfolios are seen to be traded at a premium, and overall, pricing remains steady for MOBs. Of the top 50 active markets, Charlotte was third, following New York and LA.  The overall effects of COVID-19 do not appear to impact healthcare properties which are considered a ‘safe harbor’ but there are potential sale-leaseback opportunities if owners and investors decide “to dispose of capital-intensive real estate holdings.”

View the Presentation

Why Office Leases Are Getting Shorter And What That Means For Valuations

By Jon Banister

Tenant demand in the office market has been increasingly favoring shorter-term lease deals, a trend that complicates how much buildings are worth.

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

The Appraisal Institute Board of Directors adopted one 45-Day Notice item on its agenda during its Aug. 6-7 meeting, which was conducted via videoconference due to the coronavirus pandemic.

The Board adopted the proposed amendments to Appraisal Institute Regulation No. 4 regarding streamlining the requirements for readmission to Designated Membership. The 45-Day Notice was distributed to Appraisal Institute professionals June 22.

The Board also voted to send to 45-Day Notice proposed amendments to the Appraisal Institute Bylaws regarding the Audit Committee. Additionally, a project team will be created to study potential changes to Appraisal Institute Bylaws, policies and procedures regarding the nomination and election process for vice president.

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Craig Steinley Elected 2021 Appraisal Institute Vice President

Craig Steinley, MAI, SRA, AI-GRS, AI-RRS, of Rapid City, South Dakota, was elected 2021 vice president of the nation’s largest professional association of real estate appraisers Thursday by its Board of Directors during the Board’s virtual meeting.

Steinley’s one-year term at the Appraisal Institute will begin Jan. 1, followed by one year each as president-elect, president and immediate past president. He will serve on AI’s Executive Committee and the policy-making Board of Directors all four years. He also will chair the Finance Committee in 2021 and the National Nominating Committee in 2024.

“I feel privileged to have been elected vice president of the Appraisal Institute, and I’m excited to help guide the organization through these unusual times,” Steinley said. “I look forward to working hard for valuation professionals in the United States and around the world.”

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Banks Tightened CRE Loan Standards in Q2: Fed Survey

Lenders tightened their standards on commercial and industrial business loans to firms of all sizes amid weaker demand during the second quarter, the Federal Reserve reported Aug. 3 in its newest Senior Loan Officer Opinion Survey. The tightened standards and reduced demand also applied to construction and land development loans, nonfarm residential loans and multifamily loans.

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CRE Recovery on the Horizon, According to CBRE Report

The COVID-19 pandemic rages on, with the U.S. remaining one of the worst-hit parts of the globe. Other nations have contained the virus or are dealing with more isolated outbreaks. There's no clear end in site for the crisis. The global economy remains gripped by uncertainty and hobbled by measures necessary to contain the spread of the virus.

It's in this context that CBRE is releasing its Global Real Estate Market Outlook 2020 Mid-Year Review report. As it did with its 2020 Real Estate Market Outlook, CBRE has provided NREI an advance look at the report. The slideshow walks through the firm's observations with interactive versions of the charts published in the report.

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Appraisal Institute Cancels 2020 LDAC Conference, Looks Forward to Resuming in 2021

The Appraisal Institute on July 29 announced that it is canceling its 2020 Leadership Development and Advisory Council conference, which had been scheduled for Oct. 26-28 in Washington, D.C. The conference originally was to take place in May, but had been pushed back due to concerns about the coronavirus.
 
The LDAC Planning Committee and AI staff said the decision to cancel this year’s conference is in the best interest of the safety and well-being of LDAC participants due to ongoing concerns about the coronavirus pandemic. They cited input from conference registrants, as well as guidance from the Centers for Disease Control and Prevention, local authorities and others.  
 
The Appraisal Institute is planning on a successful LDAC conference next year, which is scheduled for May 19-21 in Washington.  

Economic Recovery Ending, Another Slowdown Expected: JLL

The U.S. economy expanded in May and June, but by some measures it already is slowing down, according to data released July 20 by real estate firm JLL. Advance retail sales rose 7.5% between May and June, and industrial production jumped 5.4% during the same period, but consumer sentiment declined in July over fears of increasing COVID-19 cases.

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Commercial Appraisal Data Standards Released for Comment

The Mortgage Industry Standards Maintenance Organization, known as MISMO, on July 24 released for comment its proposed commercial appraisal data standards. The standards are intended to facilitate the exchange of commercial appraisal information, which is critical for underwriting and loss mitigation, between multiple industry participants. Comments are due Sept. 21.

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Fed Beige Book Shows Increase in Home Sales, Decrease in Commercial Activity

Home sales increased moderately across most Fed districts, but commercial activity remained at a low level, with reports of mixed or deteriorating conditions — although most tenants reportedly paid rent in June, according to the Federal Reserve's latest Beige Book released July 15. Investment activity was slow to nonexistent across the board.

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CRE, Multifamily Lending Down this Year; Partial Rebound Expected Next Year: MBA

Commercial and multifamily mortgage bankers are expected to close $248 billion in loans backed by income-producing properties this year, a 59 percent decline from 2019’s record volume of $601 billion, a new Mortgage Bankers Association forecast said.

Total multifamily lending alone, which includes some loans made by small and midsize banks not captured in the overall total, is forecast to fall by 42 percent to $213 billion in 2020 from last year’s record total of $364 billion. MBA anticipates a partial rebound in lending volumes in 2021, with activity rising to $390 billion in commercial/multifamily mortgage bankers originations and $308 billion in total multifamily lending.

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Appraisal Institute Opens Registration for 2021 VP Presentations and Board Meeting

The Appraisal Institute Board of Directors will hold an election for the 2021 vice president during the morning session of its third quarter meeting Aug. 6 and host a general open session in the afternoon. Registration is open for both meetings. 
 
The meeting will begin at 9 a.m. CDT, and the vice president nominees will make their presentations to the Board at the start. Once the presentations have concluded, the Board will go into Executive Session. AI professionals who have registered to attend this meeting will be able to rejoin it at approximately noon CDT for the election of the vice president.
 
AI professionals must register for all meetings they wish to attend. If you wish to attend the vice president presentations and election beginning at 9 a.m. CDT and the general open session beginning at approximately 1 p.m. CDT, you will need to register for both. Please note that space is limited.
 
 
 
You will receive a confirmation email with your own unique link to join a session once you have registered.