We all know that a great deal of the Real Estate market crash was due, at least large in part to, irresponsible lending (and borrowing). That inflated property values certainly played a role, is no secret and indeed, something had to be done to change things. BUT, wait until you see just how far the pendulum has swung to the opposite but equally insane side of the spectrum. As a follow up to our last blog Appraisal Rebuttals; The Cure for a Schizophrenic Market I will outline how appraisals used to be ordered and how they work (or don’t) now. If you own property, plan on owning property, or at all have a stake in the real estate market, this will be of interest to you.
We have certainly seen the good news/bad news in our Corral Canyon micro market over the last 6 or so years. The bad news in the regional real estate market had been the low sales prices fueled by distressed sales. Our Canyon was not immune to this, though our source of distressed sales had a slightly different geneses; the fire rebuilds. Sadly, many of the homeowners attempting to rebuild did not complete the process for a myriad of reasons. This is why we saw some absolutely spectacular short sale and foreclosure deals on brand new builds and homes just short of having a certificate of occupancy or C of O (C of O is the final permit allowing a structure to be inhabited). So what is the good news for our canyon values and, most importantly for many, “when can I refinance”?