I recently attended a neighborhood Emergency Preparedness class taught by the Emergency Manager for Clackamas Fire.
With all of the natural disasters this year, it prompted me to take the class and finally get the Emergency Kit completed.
The most likely and overdue disaster would be the Cascade Subduction Zone earthquake which is 72 years overdue and is estimated to be 8.0-9.2 in magnitude. The zone stretches from Victoria BC to Cape Mendocino in northern California. At the upper end of magnitude, this earthquake is predicted to be the worst natural disaster in North American history and FEMA projects 13,000 will die from the quake and likely tsunami.
Yikes! Other reasons to have an emergency kit is winter weather!
This was given to me by Clayton Scott of Penrith Loans.
Now I understand…
A good client called me recently in need of an appraisal just outside of my Portland service area. I had a little extra time that day, so I said I would check around and see if I could find someone to help them. Even after calling five or six different appraisers, I was unable to find anyone willing to take the rural appraisal assignment. Most of the appraisers that I called are booked up for two to three weeks and are only servicing their best clients or are cherry picking the easier or higher-paying assignments. This anecdote suggests a shortage of appraisers.
The number of appraisers has been declining since the 2007 real estate market collapse. According to the Appraisal Institute Research Department, the number of active appraisers in the United States dropped by roughly three percent each year from 2008 through 2014. The decrease was smaller in 2015, but it is noteworthy that 62% of appraisers are over the age of 50. Of the total number of appraisers, a mere 1% are under the age 25.
I researched Oregon appraiser statistics back to 2010. The total of active Oregon appraisers mimics the national trend, falling from 1,601 in year 2010 to 1,377 by year 2015. The number of Certified Residential Appraisers has remained nearly constant since 2010 (losing only 15), but the total of Licensed Appraisers has plummeted more than 50% in that time. There are currently only 69 Registered Appraiser Assistants training to become an appraiser.
I believe there are several factors creating a shortage of appraisers.
· There is strong demand for appraisers due to an active real estate market that is bolstered by an improved economy and continued low interest rates.
· Appraisal fees have not kept pace with inflation. Ten years ago, the typical appraisal fee in the Portland area for a standard lender appraisal was $400 to $450. I no longer accept assignments at these fees, but this remains the payment offered by the majority of lender and AMC clients.
You would think that supply and demand would increase prices and balance the market. However, such market forces have not worked in favor of appraisers because by receiving assignments from only a few larger appraisal management companies, appraisers have less power to negotiate higher fees. Additionally, appraisers are often required to accept a client’s (management company’s) fee structure prior to being able to receive assignments from them. The result is that appraisers accept lower fees but often turn down more difficult jobs.
· Appraisal report requirements and oversight have increased since the last real estate market collapse. Appraisals that I do today take at least twice as long as the same report would have taken prior to 2007. This is despite advancements in technology and is caused mostly as a result of having to show and explain everything that in the past might have only remained in the work file or would not have been an issue.
· Appraisal liability has escalated since the 2007 real estate market collapse. Appraisers have increasingly become the target for lawsuitswhen a homeowner fails to pay their mortgage.
· It is more difficult to become an appraiser. If you want to make money as an appraiser, you must be at least Certified Residential. The Certified Residential Appraiser now requires a bachelor’s degree and 2,500 hours of experience over a minimum of two years. Working for two years as a low paid Appraiser’s Assistant after paying for college is the most difficult hurdle for many.
· Not many appraisers will train assistants. Only about 5% of appraisers in Oregon have an assistant and not all assistants will survive to become appraisers. Some of the reasons that appraisers tend to be unwilling to accept assistants are listed here.
o Assistants are employees. I am not an employment tax expert, but it is my understanding that an appraiser assistant is an employee and cannot be an independent contractor because the supervising appraiser has too much control over their schedule and work. Most appraisers are home businesses without the infrastructure to handle employees.
o Liability is increased when training an assistant because if the assistant make a mistake, the supervising appraiser is fully accountable.
o Assistants are very limited in what they can do to assist in the appraisal process. Lenders will typically not accept an appraisal where the assistant was the only one who viewed the subject property and the comparable sales. This means that even if the appraiser is paying the assistant a small wage, the gain in productivity might not be commensurate.
The problem of few appraisers is complex and likely will continue in the next year. However, I believe that there is promising technology on the horizon that will make individual appraisers much more efficient and permit them to handle larger volumes of work with fewer people. Additionally, any increase in interest rates will likely reduce the number of homeowners refinancing and relieve some of load on appraisers.
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Tips on Bathroom Vanity Lighting
Properly illuminated bathroom lighting lets you put your best face forward!
Tip #1 – Mount vanity lights on either side of the mirror. Lighting above your head casts shadows on your face and you gain 10 years.
Tip #2 – Distance matters. The American Lighting Association's general rule is to mount vanity lights 65-70 inches from the floor, at about eye level. Ideally, the fixtures should be placed about 28-30 inches apart. This allows the light to fully illuminate your face without casting shadows.
Tip #3 – Consider shade choice. Sconce shades are an important feature. The transparency and color greatly affect how much light is emitted. White fabric shades give off a diffused light that provides a bright and clean tone. Often times, amber shades simply do not allow enough light to properly illuminate.
Biggest Homeowner Tax Deductions
Here are four of the the biggest homeowner tax deductions in 2015. Expect to receive a 1098 report from your lender with details. Other deductions are available. Check with your accountant!
1. Mortgage Interest Paid – Annual mortgage interest is tax deductible for first mortgages, second mortgages and home equity lines of credit. The deduction is for a primary residence and up to one second (vacation) home.
2. Discount Points – If you purchased or refinanced in 2015, you may have paid discount points to obtain a lower rate. One full discount point is equal to 1 % of the loan amount. The IRS classifies discount points as prepaid mortgage interest. Restrictions apply.
3. Property Taxes – Annual property taxes paid each year are also tax deductible for homeowners. If you purchased a property in 2015, you will want to keep track of your settlement statement which shows property taxes you paid at closing.
4. Mortgage Insurance – Mortgage insurance is required on loans purchased or refinanced with less than 20% equity. Some restrictions apply if your adjusted gross income is over $100,000.
This should not be considered tax advise. For tax-related questions, please speak with a licensed accountant or see IRS Publication 936.
What do updating attic insulation, entry door replacement and garage door replacement have in common?
According to Remodeling Cost versus Value 2016 report, they are among the three highest improvements which yield the greatest recoup when selling properties. For a complete list and explanation, https://s3.amazonaws.com/…/CVV…/2016/Consumer/portlandor.pdf
According the the RMLS (Regional Mulitple Listing Service), December closed sales were the strongest since 1992!
2016 Economic Predictions