My New Blog

As appraisers, we are asked to arrive at "market value". But in todays economy, in some neighborhoods, fear and absentee lenders are killing values, in an effort to get the problem properties off the books.

That is not market value.

That is selling into a buyers market. You have to sell, what will somebody pay.

That is buying something that the seller doesnt really value, having already written off the loss. Lower bids, fewer buyers, falling prices.

In the past, when local lenders dominated the market, this would not have happened. Lenders would not have "Given away" homes, they would keep them, rent them, rework the loan; they were interested parties, seeking the greater good for the area, knowing that one drastically reduced home is like poison in the water.

Not so with national and international lenders.

As appraisers, we are determining a "disposition value", and regrettably, that value is becoming the only supportable value for refinancing, or sales.

The federal government got us into this problem, allowing large banks to swallow up local banks, and letting savings and loans get out of residential lending and into all other kinds of lending. They need to take steps to get us out, back to a system that rewards lender sellers for holding out for higher prices in disposition of foreclosed homes.

Surely we are approaching the bottom of the market, as fewer and fewer buyers are present, but a willing and qualified buyer has only to make an offer, any offer, and will be rewarded.

What we need is more local lenders, interested in our local economy, not that of the nation, or world; with fewer reasons to decline, and more centered on local economy building, local values, local population.

A return to local banking, not foreign or regional or systems; bankers who are only interested in you and me, and by definition, themselves.

People over policy.