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Industrial Sector to Experience Growing Demand and Absorption Rates, Data Shows

By Patricia Kirk

The outlook for industrial real estate in 2019 is bright, with continued strength in property fundamentals, demand outpacing supply, rent growth and strong absorption squeezing already tight vacancy rates.

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AI Opposes Residential Appraisal Threshold Increase

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 participated in bipartisan meetings with members of Congress Jan. 15, urging them to review a proposed increase to the residential appraisal threshold.
 
The Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency have proposed raising the residential appraisal threshold from $250,000 to $400,000.
 
The Appraisal Institute is asking appraisers to voice their opposition to the proposed increase. AI created an action alert where its professionals and others can weigh in on this important matter. The action alert provides talking points that appraisers can use in their letters, and AI encourages appraisers to share their own stories and experiences when speaking against the proposal. 
 
Use the AI action alert to make your voice heard.
 
If you have any questions regarding this issue, contact Bill Garber, AI’s director of government and external relations, at 202-298-6449 or by email at [email protected].

Appraisal Institute President Outlines 2019 Goals

2019 Appraisal Institute President Stephen Wagner, MAI, SRA, AI-GRS, outlines the Appraisal Institute’s priorities for the year in the organization’s latest video.

As the Appraisal Institute continues to serve as the global valuation profession’s thought leader, the organization remains at the forefront of the most pressing issues facing appraisers today.

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26 Members Received Designations from the Appraisal Institute in December

The Appraisal Institute designated 26 members in December, including five who received their MAI designations, seven who received their SRA designations, 12 who received their AI-GRS designations and two who received their AI-RRS designations. 

Click here to view.

President's Letter - Farewell

Dear fellow members of NCAI:

It is with mixed emotions that I submit to you this fourth and final President’s Report. As my tenure as President comes to a close, I am excited to begin the next chapter in my life, but at the same time melancholic that my term has to end. While not without its challenges, my time on the Executive Committee was among the most rewarding experiences of my life, both personally and professionally, because of members like you. I want to extend my sincere gratitude to the North Carolina Chapter for entrusting me with the great honor and privilege to serve what I believe is by far the best Chapter in the Appraisal Institute.

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Appraisal Institute Recognizes 1 Individual as 'Volunteer of Distinction' for Q4

The Appraisal Institute on Jan. 9 announced the recognition of one individual as a "Volunteer of Distinction" for the fourth quarter. 

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Appraisal Institute Accepting Nominations for 2 Awards to be Presented in July

The Appraisal Institute announced Jan. 9 that it is accepting nominations for the Lifetime Achievement Award and the Outstanding Service Award, two ways AI recognizes some of its most deserving professionals. Nominations for both awards are due May 24. Awards will be presented at the Appraisal Institute's 2019 Annual Conference July 22-24 in Denver.

Click here to learn more.

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.

Letter from the President: Winter Chapter Business Meeting

Dear NCAI Member, 

I hope 2018 was a great year for you, your family, and your business, and I wish you a healthy and prosperous New Year in 2019!  

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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.

Reverse Mortgage Volume Reaches 14-year Low in November: Data

By Jessica Guerin

After months of uneven recovery following last October’s program changes, reverse mortgage volume has fallen to a low it hasn’t seen since 2004.

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Commercial, Residential Real Estate on Different Paths: Fed Beige Book

Commercial real estate activity was modest to moderate in most Federal Reserve districts, while residential activity was reported to be mostly flat or declining — although the majority of districts reported increased home prices, according to the Fed Beige Book released Dec. 5. 

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Incentive Programs Benefit Multifamily, CRE in Urban Areas, State Agencies Say

By Andrea Riquier

Commercial real estate in large urban areas will be the big winner from the tax scheme aimed at boosting investment in needy areas, according to an analysis released in November.

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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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Housing Market to Continue Challenging Buyers in 2019: Realtor.com

By Kelsey Ramirez

Buying and selling a home is about to get a lot more difficult in 2019, or so says one expert in her forecast for next year.

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FHFA Sets Conforming Loan Limits for Fannie Mae and Freddie Mac

The Federal Housing Finance Agency (FHFA) today announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2019.  In most of the U.S., the 2019 maximum conforming loan limit for one-unit properties will be $484,350, an increase from $453,100 in 2018. 

Baseline limit

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Investors Seek Unused and Underused Properties for Last-mile Sites: JLL

The limited supply of urban industrial inventory available for “last mile” e-commerce distribution space is causing investors and end-users to get creative by repositioning other types of real estate with failed uses or shrinking demand, according to a JLL report, Urban infill: the route to delivery solutions.”  The report notes that annual total e-commerce deliveries have more than tripled over the past five years, but development of new urban industrial infill assets has remained relatively flat.

Despite dwindling opportunities in urban locations, investors remain interested in the 18 percent sales price premium last mile industrial assets command over “first mile” locations, and the higher rents users are willing to pay in order to be near their customer base.

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Massachusetts Supreme Court Rules on Applicability of Appraiser Bias

The Massachusetts Supreme Judicial Court on Nov. 26 ruled that the prohibition on appraiser bias contained in the Uniform Standards of Professional Appraisal Practice and the Appraisal Institute’s Code of Ethics and Certification Standard, or the appearance of bias, applies only to individuals and not to an appraiser’s employer.
 
 
The Court’s ruling is consistent with the position advanced in the amici curiae brief submitted by the Appraisal Institute and the Massachusetts Board of Real Estate Appraisers. At stake was the ability of appraisers who perform services in Massachusetts to engage in the valuation of properties when the appraisers’ employers provide other services, such as brokerage, leasing and asset management.
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