July 2008

MOVING REMAINS A NATIONAL PASTIME

According to Relocation.com, around 40 million people in the United States move from one home to another each year.

According to the firm’s survey, the top destination states for out-of-state movers are (1) California (6%), (2) Florida (5%), (3) Texas (4%), (4) New York (3%) and (5) Georgia (2%).

Of the 1,237 movers who responded to the survey, 14% owned their previous home before buying another. While 15% of the respondents moved from a rented home to a purchased one, 19% moved from a home they owned to one that they were renting.

As a result of this and other factors, the homeownership rate, according to the U.S. Census, is on its way down. After peaking at over 70%, the Census reported homeownership in this country fell from 69.1% to 67.8% in 2005. With the increasing number of foreclosures this number is expected to continue to drop.

According to Mark Zandi, chief economist for Moody’s Economy.com, "We’re not going to see homeownership rates like that for a generation."

To learn how ELLIOTT® can be of service with relocation appraisals go to www.elliottco.com/services/relocation.htm.

BROKER WHO GUTTED FORECLOSED HOUSE LANDS IN JAIL

A mortgage broker from Sharpsville, PA, has been sentenced to three-to-15 months of incarceration for stripping his foreclosed home before it was to be auctioned.

Scott McCuskey’s home had been appraised at $1.2 million when he obtained a loan to buy it. After it was foreclosed, but before the sheriff’s sale, McCuskey removed the cabinets, doors, countertops, baseboards, bathtub and shower fixtures, sinks, toilets, carpeting, a Jacuzzi and other fixtures from the house.

After the stripping, the home was appraised at only $180,000 and McCuskey was charged with theft and fraud. The defendant told Mercer County Judge Thomas Dobson that he thought he was allowed to take those items. Dobson, noting that McCuskey was a mortgage broker, did not buy that argument and ruled that McCuskey had to not only serve the jail time, but also pay the $174,000 in restitution to the mortgage company that financed his home.

BABE RUTH’S SPRING TRAINING PENTHOUSE ON THE MARKET

The former spring training home of New York Yankee greats Babe Ruth and Lou Gehrig is on the market for $275,000 in St. Petersburg, FL.

The penthouse of the Flori-de-Leon apartment building has had its asking price reduced from $330,000. The two-bedroom, one-bath condominium has 1,420 square feet of floor space and is available only to people 55 or older.

Gehrig bought the penthouse in the late 1920s, but sold it to Ruth and bought the condo next door. According to Jim Thompson, the condo’s current owner, Gehrig grew weary of having to encounter fans as he entered and left the residence, while Ruth enjoyed the adulation.

"It’s just amazing," Thompson said of the condo he is trying to sell so that he can move near his antique shop in Tampa. "I just rehabbed it a bit, but it’s about the same as it was."

DECLINING LAND PRICES INCREASE INVESTOR INTEREST

As changes in the real estate market are sending land prices down, in many areas throughout the United States and worldwide, interest by investors of this land is going up.

When real estate prices were escalating rapidly a few years ago, developers were buying land for the purpose of building housing communities on it. After real estate prices began declining, a lot of these developers decided not to build and put the land they had acquired back on the market.

According to Real Capital Analytics, the price per square foot of land suitable for construction of retail buildings was only $44 in 2008, after averaging $79 in 2007.

Last year, the research company said, the average price per square foot of land for condominiums was $151, while this year it has dropped to $87.

Jaime Raskulinecz, a New Jersey real-estate investor, said, "I haven’t seen this market in 20 years."

To learn about the services that ELLIOTT® can provide concerning vacant land, go to www.elliottco.com/properties/land.htm.

APPRAISALS REMAIN ELLIOTT’S CORE BUSINESS

While our company offers a variety of services, the prime focus of business for ELLIOTT® & Company Appraisers has always been that of real estate appraisals. The company was formed in 1980 for that purpose, and today we have a network of about 2,000 appraisers throughout the United States.

ELLIOTT® can perform practically every type of real estate appraisal known to the industry, including all types of commercial and residential appraisals. Our network of expert appraisers includes those with the most prestigious designations in the business, including MAI and SRA.

More information about the appraisal service provided by ELLIOTT® can be found at www.elliottco.com/services/appraisals.htm.

ASK MARTITIA

QUESTION:  What compliance issues does an appraiser need to consider, in dealing with current fair housing laws, while working on appraisal assignments?

MARTITIA: The Conduct section of the Ethics Rule states, "An appraiser must not use or rely on unsupported conclusions relating to characteristics, such as race, color, religion, natural origin, gender, marital status, familial status, age, receipt of public-assistance income, handicap or an unsupported conclusion that homogeneity of such characteristics is necessary to maximize value."

Martitia Mortimer, Elliott’s executive vice president, answers appraisal questions on a regular basis in Elliott Appraisal News.

LETTER TO THE EDITOR

The mortgage mess is not entirely the fault of real estate appraisers, borrowers, mortgage brokers, lenders or government agencies, but the appraisal industry should take responsibility for its part. Many appraisers have been influenced by financial pressures of clients and are not objective in estimating value.

The appraisal industry should stop trying to change the mortgage industry and concentrate on its own problems. Our problems go beyond the lending industry.

We must continue to hold ourselves out as professionals, as opposed to tradesman. We need to be in the pursuit higher quality of work and adhere to some form of ethics. Therefore, I support the HVCC (Home Valuation Code of Conduct), because it better than what we currently have. At least it’s a step in the right direction and not a continuation of the double talk that has been dogging this industry for years.

While the consensus is that the HVCC will require appraisers to go through an AMC (appraisal management company), that is not how I read it. The HVCC requires that a third party, independent of the field appraiser, to go between the appraiser and client. That can be created in several different ways. Appraisal shops could act as a third party. Many appraisal shops do not allow the field appraiser to talk to the client. Is this not doing the same thing and meeting the intent of HVCC?

If you take the "require that you work for an AMC" out of the picture, a lot more appraisers would support the HVCC.

I have passion for what I do. It goes beyond dollars and cents, and if my passion offends someone I do apologize. But I will not apologize for the passion for my work and trying to be a professional appraiser.

Jeffrey A. Patterson
Residential Appraisers
Alfred, ME

WE WANT TO HEAR FROM YOU

ELLIOTT® is now publishing "Letters to the Editor" from our readers. If you have an opinion about a real estate related subject that you would like to share with other readers of Elliott Real Estate News, you are invited to e-mail a synopsis of your thoughts and observations to kevin@elliottco.com.

QUOTES

"The secret of happiness is to make others believe they are the cause of it." -  Al Batt

"Lack of culture means ignoble civilization and, therefore, imminent downfall." -  Frank Lloyd Wright

"What is a cynic? A man who knows the price of everything and the value of nothing."
                                                                                                                     -  Oscar Wilde

"Originality is the fine art of remembering what you hear, but forgetting where you heard it."
                                                                                                                         -  Laurence Peter

"There is nothing wrong with America that the faith, love of freedom, intelligence and energy of her citizens cannot cure."
                                                                                                                                                                    -  Dwight Eisenhower

"Faith must have adequate evidence; else it is mere superstition." -  Alexander Hodge

"I find television very educating. Every time somebody turns on the set, I go into the other room and read a book."
                                                                                                                                                                 -   Groucho Marx

"Mediocrity knows nothing higher than itself, but talent instantly recognizes genius." -   Sir Arthur Conan Doyle

"You can live to be a hundred if you give up all the things that make you want to live to be a hundred." -   Woody Allen

"The true teacher defends his pupils against his own personal influences." -   Amos Bronson Alcott
 

Newsletter Editor: kevin@elliottco.com
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