Appraisers' Free Forum

**Steve Owen**

Did anyone else get the idea that a lot of the sub-prime mortgage problem was in California, Florida, and Colorado?

http://www.nytimes.com/interactive/2007/11/03/weekinreview/20071103_SUBPRIME_GRAPHIC.html?hp#

Doesn't look like it's true. So, since CA and FL are near the top in foreclosures, but were nowhere near the top in sub-prime. Could this simply be another example of the rich and powerful (banks) raising the hue and cry (public perception) against the poor and powerless (appraisers/low-income borrowers)?
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I haven't a particle of confidence in a man who has no redeeming petty vices.
- Mark Twain, a Biography

**Edd Gillespie** · Certified General Joined: 13 Aug 2007 Posts: 2282

Dadgummed flash player won't load
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Edd “In the real estate economy, there are no guarantees that reason will prevail in a market where emotions run high and the amount of misinformation runs deep.” Jonathan Miller in The Matrix. So what’s an appraiser to do?

**Tina** · Posted: Tue Nov 06, 2007 9:34 am Post subject: Check the date....

I wish the data as reflected on the map was more current. The data source is the 2000 census. I wonder what it would look like with current data Confused

TB

**Edd Gillespie** · Certified General Joined: 13 Aug 2007 Posts: 2282

At the risk of not knowing what I am saying since I can't download this thing, my study leads me to think there are three occurances related to real estate market meltdown. Overheated markets, overbuilt markets and unemployment. As far as I know some markets that you mention have experienced overheating and overbuilding. These causes are seperate from the sub-prime crisis and resetting of mortgages to higher interest rates that seems to be causing foreclosures. The subprime thing has resulted in some investor disenchantment (to say the least) and therefore made finding mortgage money somewhat difficult. It is very difficult to get the media to listen to anything that can't be reduced to a simple sound bite. I see it not so much a lie as a lack of understanding the markets, which of course is a part of our job.

We have meltdown and subprime contributing to the foreclosure rates. One involves people with money one does not.
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Edd “In the real estate economy, there are no guarantees that reason will prevail in a market where emotions run high and the amount of misinformation runs deep.” Jonathan Miller in The Matrix. So what’s an appraiser to do?

**Steve Owen** · Posted: Tue Nov 06, 2007 10:27 am Post subject:

**Edd Gillespie** · Certified General Joined: 13 Aug 2007 Posts: 2282

**Steve Owen** · Posted: Tue Nov 06, 2007 11:42 am Post subject:

Mako · Member Joined: 11 Aug 2007 Posts: 849

**Edd Gillespie** · Certified General Joined: 13 Aug 2007 Posts: 2282

[quote="Steve OwenSo, the question becomes multi-fold. What should have appraisers in those markets done? [/quote]

I've got some fairly well supported definitions of overbuilding and overheating. I think when the signs are detected the appraiser appraises to the market but warns of an impending decrease in prices and values based upon his market analysis and not on the chicken little syndrom. Obviously when the down turn will occur is not within the appraiser's knowledge and I know of no measure that can predict what "critical mass" is, but the overbuilding and overheating scenarios are remarkable related as preceding price decreases.

I'll share those difinitions when I find my papers.
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Edd “In the real estate economy, there are no guarantees that reason will prevail in a market where emotions run high and the amount of misinformation runs deep.” Jonathan Miller in The Matrix. So what’s an appraiser to do?