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Slowdown in Industrial Sector Likely, Which Could Favor Investors, JLL Reports

By Michael Tucker

After several quarters of record-breaking high rents and low vacancies, the industrial real estate sector will likely "pause" soon, said JLL, Chicago. But it said that could be good news for smart owners, investors and occupiers.

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FEMA Brings Back Flood Insurance Policies During Lingering Government Shutdown

By Caroline Basile

The Federal Emergency Management Agency announced late Friday that it will resume selling and renewing flood insurance policies, rescinding its initial ruling that the National Flood Insurance Program cannot be renewed amid the ongoing government shutdown.

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AI Seeks Public Hearing on Appraisal Threshold Increase

The Appraisal Institute and 15 other organizations submitted a letter Dec. 21 to the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency requesting that they hold a public meeting as part of the process to determine whether to increase the residential appraisal threshold from $250,000 to $400,000. 

Click here to read the letter.

AI Rejects Proposed Residential Appraisal Threshold Increase

The Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve on Nov. 20 released a proposal to increase the threshold at which residential home loans require an appraisal to $400,000 from $250,000.
 
The rule would not apply to loans wholly or partially insured or guaranteed by, or eligible for sale to, a government agency or government-sponsored enterprise.
 
“The Appraisal Institute strongly objects to the FDIC’s proposal to raise residential appraisal thresholds,” said 2018 AI President James L. Murrett, MAI, SRA. “Congress just considered establishing a residential appraisal exemption and instead chose to enact a vastly different allowance involving appraisers in rural areas. This proposed rulemaking flies in the face of this action, and recreates the same type of environment that led to the housing crisis.
“By increasing the residential appraisal threshold from $250,000 to $400,000, FDIC would threaten the vital role that appraisers play in real estate transactions” said Murrett. “This action would undermine the crucial risk mitigation services that appraisers provide clients and users of appraisal services.
 
Murrett noted, “Raising the threshold means more evaluations will be allowed in place of appraisals. “The Appraisal Institute anticipates that will result in a return to the loan production-driven environment seen during the leadup to the financial crisis, where appraisal and risk management were thrust aside to make more – not better – loans. Apparently, the FDIC has learned nothing from that experience.
 
“Reducing regulations may seem to make sense initially, but the FDIC’s announcement raises significant safety and soundness concerns that the Appraisal Institute finds deeply disturbing,” Murrett said.

Some Economists See Looming Recession, but Goldman Sachs Says

By Kelsey Ramirez

Many economists are predicting the next recession could occur in 2020 or even 2019, but that’s not what Goldman Sachs is predicting.

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AI and Land Trust Alliance Support Conservation Easement

The Appraisal Institute and the Land Trust Alliance co-signed a letter Nov. 29 urging congressional leaders to advance the Charitable Conservation Easement Program Integrity Act, which would help maintain the integrity of conservation easement donations by closing an apparent loophole related to abusive syndicated tax shelters. 

Click here to read more.

42 Members Designated in November

The Appraisal Institute designated 42 members in November, including 18 who received MAI designations, six who received SRA designations, 16 who received AI-GRS designations and two who received AI-RRS designations.

View the list here.

NCAI Comments on NCUA's Proposal

As you're aware by now, AI joined 17 other groups to submit public comments opposing NCUA's proposal to quadruple – from $250,000 to $1 million – the appraisal threshold for non-residential real estate loans. Our own state chapter (NCAI) has submitted public comments as well. Click the button below to read them.

Read NCAI's Letter

72 Members Designated in October

The Appraisal Institute designated 72 members in October, including; 1 who received MAI AND AI-GRS designations; and 34 who received MAI designations; 11 who received SRA designations; 17 who received AI-GRS designations; 9 who received AI-RRS designations.

Click here to view.

Appraisal Institute Presents at Key Industry Events in October

The Appraisal Institute announced Oct. 31 that its elected officers and others represented the organization at key events in October.
 
President James L. Murrett, MAI, SRA, attended Valuation Expo, Sept. 30-Oct.3, in Las Vegas, where he presented “What’s New at the Appraisal Institute.” AI also exhibited at this event.
 
Vice President Jefferson L. Sherman, MAI, AI-GRS, spoke at the Iowa Commercial Real Estate Expo, Oct. 2, in Des Moines on “Issues Affecting the Appraisal Community.” 
 
President-Elect Stephen S. Wagner, MAI, SRA, AI-GRS, represented AI at the American Society of Appraisers’ International Appraisers Conference, Oct. 7-10, in Anaheim, California. 
 
Murrett and CEO Jim Amorin, MAI, SRA, AI-GRS, represented AI at Expo Real, Oct. 8-10, in Munich. 
 
Sherman presented at the joint FECOVAL/UPAV/Pan Pacific/IRWA meeting, Oct. 8-13, in Tijuana, Mexico, where he spoke on the “State of the Appraisal Profession” and “AI Body of Knowledge.” 
 
Murrett presented at The European Group of Valuers Associations (commonly known as TEGoVA) Fall Meeting, Oct. 18-20,  in Athens, Greece, about “Prospective Values.” 
 
2016 AI President Scott Robison, MAI, SRA, AI-GRS, AI-RRS, spoke on the behalf of the organization at Remnin University in Beijing on “Appraisal Review in the U.S.” and at the China Institute of Real Estate Appraisers and Agents Annual Meeting, Oct. 25-26, in Beijing, on “Impact and Opportunity of Technology-Based Valuations on the Valuation Profession.”
 
AI also exhibited at the Land Trust Alliance Rally, Oct. 11-13, in Pittsburgh, and at the Mortgage Bankers Association Annual Meeting, Oct. 14-17, in Washington.

AI Professional Appointed to Missouri Real Estate Appraisal Board

By Liam Quinn

Missouri Gov. Mike Parson on Oct. 18 appointed Randy Bryson, SRA, AI-RRS, to the state's Real Estate Appraisers Commission. Bryson is president of Associated Property Analysts in Columbia and has been an appraiser since 1980. 

Click here to read more.

NCAI Leadership Met with AI 2019 President Stephen Wagner

NCAI 2019 President Sheri Colvin and NCAI 2019 President Elect Chris Johnson met with AI 2019 President Stephen Wagner at the AI Chapter Leadership Program in Chicago, IL – October 2018. Learn more about the event here.

  

Mortgage Rates Reach New 7-Year High

The modest decline in mortgage rates is a welcome respite from the rapid increase in rates the last few weeks. While the housing market has clearly softened in reaction to the rise in mortgage rates, the economy and consumer sentiment remain very robust and that will sustain purchase demand, particularly in affordable markets and neighborhoods.

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AI Recognizes 5 Individuals as 'Volunteer of Distinction'

The Appraisal Institute on Oct. 3 announced the recognition of five individuals as a “Volunteer of Distinction” for the third quarter. 
 
The individuals honored are:
  • Charles G. Argianas, MAI, (Chicago Chapter);
  • Hugh B. Bass Jr., MAI, (Atlanta Area Chapter); 
  • R. Wayne Pugh, MAI, (Louisiana Chapter);
  • Jose A. Rodriguez-Martinez, SRA, AI-RRS, (Puerto Rico and Caribbean Chapter); and
  • Leah Lasley Shell, SRA, (Arkansas Chapter).

AI Distributes 45-Day Notice

The Appraisal Institute on Oct. 1 sent to 45-Day Notice an item pertaining to amendments to the organization’s bylaws and regulations 8 and 9. AI’s Board of Directors will consider the proposed amendments at its Nov. 15-16 meeting in Chicago. 
 
Read about the proposed admendments. AI professionals need to sign in to read the notice.
 
AI professionals need to sign in to read the notice. Comments should be sent to [email protected].

National Asking Rents For Office Space Rise Again

Written by Michael Tucker

The national office market continues to improve, largely due to a strong job market with just a 3.9 percent unemployment rate, reported Transwestern, Houston.

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Jim Amorin Named Appraisal Institute CEO

The Appraisal Institute, the nation’s largest professional association of real estate appraisers, today announced it has hired Jim Amorin, MAI, SRA, AI-GRS, of Austin, Texas, as its chief executive officer after a nearly year-long search.

“Jim did an outstanding job as acting CEO, and we’re fortunate to have his leadership going forward,” Appraisal Institute President James L. Murrett, MAI, SRA said. “His experience in many Appraisal Institute leadership roles makes him highly qualified for this position, and I look forward to continuing to work with him.”

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FHFA Extends Comment Period for Proposed GSE Capital Requirements

The Federal Housing Finance Agency extended the public comment period for the Agency's proposed rule on Enterprise Capital Requirements by an additional 60 days, citing "high level of interest in the proposed rule and requests from multiple stakeholders for more time to evaluate it."

The previous deadline for comments was September 17; the new deadline is November 16.

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President Signs Bill Authorizing 4-month Extension of Flood Insurance Program

President Trump on July 31 signed legislation that extends the National Flood Insurance Program by four months — until Nov. 30, the White House reported. The extension gives lawmakers a small window to craft a longer-term extension for the program, which is underfunded by about $20 billion.

Click here to read more.

IRS Final Rules Define Qualified Appraisers, Standards Flexibility

The IRS on July 30 finalized rules for substantiating and reporting cash and noncash charitable deductions, stating that any tax deduction of more than $500,000 requires a qualified appraisal conducted in accordance with generally accepted appraisal standards. The rules take immediate effect.
 
“The final rules confirm that professionally designated appraisers, such as those conferred by the Appraisal Institute, are well positioned to satisfy the qualified appraiser requirements of the IRS,” said AI President James L. Murrett, MAI, SRA. “This is a highly contested area of tax law and appraisal practice, and users of appraisal services can remove doubt by turning to competent Appraisal Institute Designated Members.”  
 
“We also are pleased to see the agency provide for standards flexibility to appraisers, recognizing generally recognized appraisal standards as opposed to strict adherence to one particular standard,” said Murrett. “This protects taxpayers and the public interest, while providing more flexibility to appraisers and taxpayers procuring real estate appraisals for conservation and historic preservation easement purposes.”
 
The IRS received mixed feedback about the standards issue, but ultimately sided with the Appraisal Institute’s position on standards flexibility, noting in the final rule: 
 
Several commenters recommended that the final regulations require appraisal documents to be prepared “in accordance with USPAP” and not merely in accordance with the “substance and principles of USPAP.” Other commenters indicated that strict compliance with USPAP would eliminate use of all other appraisal standards, including some that are generally accepted in the appraisal industry. The Treasury Department and the IRS agree that it is beneficial to provide some flexibility by requiring conformity with appraisal standards that are consistent with the substance and principles of USPAP rather than requiring that all appraisals be prepared strictly in accordance with USPAP. Accordingly, the final regulations do not adopt the recommendation to require strict compliance with USPAP and retain the requirement of consistency with the substance and principles of USPAP.
 
Review the final rule.