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Help AI Support Real Estate Appraisers Everywhere - Survey

AI periodically surveys real estate appraisers to capture the current state of the real estate appraisal profession. We welcome you to take part in this important survey. Your answers will help AI serve all real estate appraisers, and increase public awareness of the appraisal profession.

This survey is anonymous and will take about 4-5 minutes to complete.

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Data Shows Homes Sold Last Year Earned Highest Return on Investment in 12 Years

By Christine Stricker

ATTOM Data Solutions, curator of the nation’s premier property database, today released its Year-End 2018 U.S. Home Sales Report, which shows that home sellers in 2018 realized an average home price gain since purchase of $61,000, up from $50,000 last year and up from $39,500 two years ago in 2016 to the highest level since 2006 — a 12-year high.

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FHA Delays Launch of Electronic Appraisal Delivery System

The Federal Housing Administration announced Jan. 28 it is postponing changes to its Electronic Appraisal Delivery system Appraisal Logging Screen due to a lapse in appropriations. FHA also is delaying the Appraisal Case Transfer screen in FHA Connection and the start date for business-to-government appraisal logging and transfer connections to an undetermined future date.

Click here to read more.

AI Among Groups Opposing Federal Banking Agencies' Action

The Appraisal Institute on Feb. 4 was one of six organizations signing a comment letter that “strongly opposed” a proposal from the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency to raise the residential appraisal threshold from $250,000 to $400,000. 
 
If the proposal is approved, nearly three quarters of residential real estate loans held in portfolio by depository institutions would be exempt from appraisal requirements. A high percentage of those loans are from rural areas.
 
The same proposal was evaluated and answered in 2017 as part of the process of the federally mandated Economic Growth and Regulatory Paperwork Reduction Act — a regulatory relief effort that encompassed four different notice and comment periods and six public hearings. At that time, the same agencies that are now proposing the increase said it “would not be appropriate” to increase the residential threshold considering safety and soundness and consumer protection concerns.
 
The “about face” is an apparent attempt by the agencies to pacify rural community banks that received discrete relief from Congress through EGRPRA. The valuation organizations that signed the comment letter have also requested a hearing on the proposal, but the agencies continue to deliberate on the issue.
 
In addition to the Appraisal Institute, the comment letter was signed by: 
  • American Guild of Appraisers, OPEIU, AFL-CIO;
  • American Society of Appraisers;
  • American Society of Farm Managers and Rural Appraisers;
  • MBREA | The Association for Valuation Professionals; and
  • RICS.
Read the comment letter.

Registration Opens for 2019 LDAC Conference; Sponsorship Opportunities Available

The Appraisal Institute opens registration Feb. 12 for its 2019 Leadership Development and Advisory Council conference, which will take place May 15-17 at the Washington Marriott at Metro Center.
 
LDAC is an innovative approach to valuation leadership development, and serves as an incubator of new ideas and helps to establish an appraiser presence in Congress with a day of lobbying on Capitol Hill. Registered attendees who participate in the complete LDAC program will receive Appraisal Institute continuing education credit.
 
Learn more about the 2019 LDAC conference and find registration information.
 
The Appraisal Institute also announced that it is offering sponsorship opportunities for LDAC. All money raised will be used to sponsor one of the numerous activities at the 2019 conference. A complete sponsor list will be published at the event and online.
 
Find more information on sponsorship opportunities.

Opportunity Zones Create Numerous Questions for Valuation Professionals

The Appraisal Institute recommends that its professionals pay close attention to investment trends associated with the Opportunity Zones that were created through last year’s tax reform legislation. The U.S. Department of the Treasury has certified 8,700 Opportunity Zones — a process performed in conjunction with state and local government agencies. 
 
Opportunity Zones are designed to spur economic development by providing tax benefits to investors by allowing them to defer tax on any prior gains invested in a Qualified Opportunity Fund until the date on which the investment in a QOF is sold or exchanged, or until Dec. 31, 2026 — whichever comes first. There is a 10 percent exclusion of the deferred gain for QOF investments held for more than five years; when held for more than seven years, the exclusion is 15 percent and when held for 10 or more years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date the QOF investment is sold or exchanged.
 
The rules and regulations for this economic development tool are trickling out, including materials from the IRS. As a result, valuation-related questions are materializing as market activity within Opportunity Zones begins. One issue is the use of a sale from outside an Opportunity Zone as a comparable for one inside an Opportunity Zone, and vice versa. Additionally, data lags may necessitate fully informed market conditions adjustments. Appraisers likely also will be asked to segregate building and land values for tax planning purposes.
 
The IRS offers more information on tax issues with Opportunity Zones. 
 
The Treasury Department provides a complete list of Opportunity Zones through its Community Development Financial Institutions Fund site. Many states offer information on local Opportunity Zones through their departments of commerce and economic development, such as this one from Illinois

72 Members Received Designations from the Appraisal Institute During January

The Appraisal Institute designated 72 members in January, including; 1 who received MAI AND SRA designations; and 42 who received MAI designations; 7 who received SRA designations; 17 who received AI-GRS designations; 5 who received AI-RRS designations.

Congratulations to NC Chapter Members Richard Duane Earley, MAI and William (Bill) W. Johnson, MAI.

Office Market Moving Toward Flex Space; New York City to See Biggest Gains: JLL

By Michael Gerrity

According to JLL's latest research, Flexing Their Muscles: Markets to Watch in 2019, the U.S. office market is poised to take on significantly more office flex space in the coming year.

"The world's top companies recognize there is no one-size-fits-all flexible approach, just like there's no one type of worker," said Doug Sharp, President, JLL Corporate Solutions, Americas. "Flexible space options allow workers and teams to select the right space to perform work each day in a location that will help realize their company's mission and their own ambitions. This is one of the reasons we see so much runway for flex space in U.S. office markets - it addresses several core needs for employers and employees alike."

Flexible space inventory (including coworking space, incubators and other short-term space options) has grown at an annual rate of 23 percent since 2010. In 2018, flexible space accounted for nearly two-thirds of the country's office market occupancy gains. JLL predicts it will comprise approximately a third of the market by 2030, compared to less than 5 percent today.

Click here to view the list.

CRE Sector Ends Year on a High; Similar Conditions Expected This Year: Berkadia

Mortgage banking and investment sales experts at Berkadia are preparing for interest rate hikes and adopting new technologies this year, according to the firm’s 2019 Outlook Powerhouse Poll. The proprietary poll, conducted in December 2018, collected insights from over 150 Berkadia investment sales brokers and mortgage bankers across 60 offices to assess 2018 commercial real estate activity and opportunities for the year ahead.

Despite four interest rate increases throughout 2018, investment sales brokers and mortgage bankers alike agree that the commercial real estate industry ended the year on a high note—82 percent said that deal volume either met or exceeded their expectations for the year. However, Berkadia’s professionals are keeping a close eye on interest rates in 2019. Eighty-one percent of mortgage bankers and 83 percent of investment sales brokers have it on their radar for the year ahead.

Click here to read more.

FHFA Won't Defend Its Structure, Constitutionality in Court

By Kelsey Ramirez

The Federal Housing Finance Agency revealed it will no longer defend its own structure, calling itself unconstitutional.

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New Home Purchase Mortgage Applications Drop 13 Percent in December, MBA Reports

The Mortgage Bankers Association this morning reported December mortgage applications for new homes fell by 13 percent from November and by 6.1 percent from a year ago.

In a separate report yesterday, the National Association of Home Builders reported its January Housing Market Index stabilized amid lower interest rates.

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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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