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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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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.

 

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.

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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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.

Mortgage Rates Drop to All-time Low for 12th Time This Year: Freddie Mac Survey

 Freddie Mac (OTCQB: FMCC) released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage (FRM) averaged 2.78 percent, the lowest rate in our survey’s history which dates back to 1971.

“Mortgage rates hit another record low, the twelfth time this year, due to economic and political ambiguity,” said Sam Khater, Freddie Mac’s Chief Economist. “Despite the uncertainty that we’ve all experienced this year, the housing market, buoyed by low rates, continues to be a bright spot.”

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CRE Prices Up Overall During Q3: Real Capital Analytics

By Michael Tucker

Real Capital Analytics, New York, reported commercial real estate price growth increased at a 1.4 percent annualized pace in September as gains in apartment and industrial sector prices offset declines in retail and office price.

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CMBS Delinquencies Improve Overall; Lodging and Retail Sectors Still Struggling: Trepp

The Trepp CMBS delinquency rate continued to trend notably lower in October. After two huge jumps in May and June, the rate has now declined for four consecutive months.

The CMBS Delinquency Rate in October is 8.28%, a decline of 64 basis points from the September number. About 1.00% of that number represents loans in the 30 days delinquent bucket – down 40 basis points for the month.

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Real Estate Economists See Short Recession, Strong Recovery

By Michael Tucker

The Urban Land Institute, Washington, D.C., said a consensus of real estate economists surveyed expect a short-lived recession and above-average GDP growth in 2021 and 2022.

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Get the Latest News and Updates on How COVID-19 Affects Appraisers

AI will continue to compile vital information about this ever-changing environment. On our Coronavirus Updates page, you’ll continue to find news and updates from government-sponsored enterprises and agencies. You’ll also find all of AI’s resources that are relevant to the pandemic including: AI Answers, webinars, ANO articles, guides, summaries and emails.

Please visit the Coronavirus Updates page on AI’s website.

Self-Storage Sector Holds Up Amid the Pandemic

By Bendix Anderson

Though the majority of properties were still close to fully occupied, over-eager developers had squeezed too many new projects into growing cities like Phoenix and Orlando, Fla., which put some downward pressure on rents. Then the initial chaos caused by the pandemic rents down further.

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AI Addresses Alleged Valuation Bias: Message from AI President

As you’re probably aware, the topic of diversity and alleged bias in the valuation profession has been covered in the media recently, and it’s an issue that AI continues to take very seriously.

As the nation’s largest professional association of real estate appraisers with over 17,000 professionals, and with more than 73,000 appraisers in the U.S., there’s no way we, or anyone else, can categorically say that no bias exists in the profession and that no individual appraiser has any bias. “Good” appraisals are credible and well supported – as you know, value is not a fact to be found. Attempting to find a non-appraiser’s opinion of the “correct” value sends us quickly down a rabbit’s hole. Instead, we are springing into action with a range of programs meant to attack whatever unconscious individual biases may exist; addressing matters of diversity within the profession; and developing policy solutions relating to mortgage financing and community and economic development.

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Commercial Deals, Rent Relief Requests on the Rise: NAIOP

In NAIOP’s sixth monthly survey tracking the effects of the pandemic on the commercial real estate industry, respondents reported continued gradual improvement in deal activity, but also reported more tenants seeking rent relief, particularly in the office sector. 

The survey was completed by 203 NAIOP members between September 15 - 18, 2020. Respondents represent a range of professions, including developers, building owners, building managers, brokers, lenders and investors.

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Vacancies Up in Many Sectors as Commercial Real Estate Feels Coronavirus Effect: Data

Vacancy rates for the apartment, retail, office and mall sectors all increased during the third quarter, with apartment vacancies up 5%, office vacancies up 0.3%, retail vacancies up 0.2% and mall vacancies up 0.3%, according to analytics firm Reis, Calculated Risk reported Oct. 6.