Start of a New Year: Home Value and Mortgage Rates

Last year there was an indication that the new year home sales were less and homes to buy would also be fewer due to lower inventory in the market. In addition, due to the Federal Rate hikes that began in 2022, interest rates have been rising. Sure they fluctuate based upon the effect of .5% or .75% rate hikes by the fed to battle inflation, but this has challenged a segment of the home buyers able to afford mortgages reducing the number of people available to buy a home.

  • In New Jersey, the government is trying to develop programs for people to purchase a home. As someone who has worked in the real estate market for decades, I hope these programs will work.
  • In the next few months, we will have to watch and see if more homes come on the market. There is also the possibility that the amount of foreclosure properties may increase in the market.
  • Please keep in mind if you are filing a tax appeal, the paperwork must be submitted by January 15, 2023. Some people file the paperwork themselves, and others hire a real estate appraiser.

Good Luck!

There are so many different factors between the Fed fighting inflation, the increase in mortgage rates, property value fluctuations do the economics of 2023, and finally, the inventory that is available throughout the course of the year. We will have to wait and see.

For more information about Coast Appraisers LLC or a quote please call or contact us via email at:
Our fax number is 732.612.1441

Thank you
Kevin McDonald
President, Coast Appraisers LLC.

Affordable New Jersey Communities for Homeowners and Renters (ANCHOR)

Homeowners and Renters Can Receive Payments of up to $1,500

In New Jersey more than three million residents are eligible for up to $1,500 in property tax relief under the NJ ANCHOR program. To be eligible for this year's benefit, you must have occupied your primary residence on October 1st, 2019. You must also file (or be exempt from) NJ income taxes.

Here are a few important dates to keep in mind:

  • The deadline for filing is December 30th, 2022.
  • Payments will be sent no later than May 2023.

In addition, ANCHOR payments will be paid in the form of a direct deposit or check, not as credits to your current or any upcoming property tax bills. There will be a mailing of ANCHOR benefit information to homeowners and tenants. Keep in mind you need to wait until the first week in October to receive your mailer. Homeowners who filed a homestead benefit application last year may be able to obtain their ID and PIN numbers online.

Here is a link to the ANCHOR program here.

Information for Home Owners

You are considered a homeowner if, on October 1, 2019, you:

  • Owned a house,
  • Owned a condominium and paid property taxes on your unit;
  • Were a resident shareholder of a cooperative housing complex;
  • Were a resident of a continuing care retirement community and your continuing care contract requires you to pay the proportionate share of property taxes attributable to your unit.

You do not qualify if your residence was completely exempt from paying property taxes or you made P.I.L.O.T. (Payments-in-Lieu-of-Tax) payments.

Information for Tenants

You are considered a tenant if, on October 1, 2019, you:

  • Rented an apartment, condominium, or house;
  • Rented or owned a mobile home located in a mobile home park.

You do not qualify if you lived in tax-exempt, subsidized, or campus housing.

Wishing you good luck with this program.

For more information about Coast Appraisers LLC or a quote please call or contact us via email at:
Our fax number is 732.612.1441

Thank you
Kevin McDonald
President, Coast Appraisers LLC.

Reflecting upon this pandemic–A real estate appraisers perspective

I did not realize something that was happening in foreign countries, and now in the United States would have an impact on the real estate appraisal industry.

The federal reserve has just reduced the interest rates. The stock market has gone down, wiping out most, if not all, of the gains over the past three years. Mortgage originations have started to increase tremendously.
In addition, the mortgage rates falling below three to four percentage points. In my professional opinion, when the mortgage rates get to two percent, there will be a lot more people looking to refinance. With lower interest rates, the buyers will be able to afford more of a house. Maybe there will be negative interests this year.

I think it is interesting that real estate appraisers are under local and federal guidelines: the banking industry, AMC’s, regulators who are always trying to make changes to the industry. This same group is continually saying we are doing a lousy job.

We are in people’s homes and buildings and our safety is just as important.

Just recently, just when the coronavirus/ pandemic situation was escalating, I had a lender call me this past Monday and asked when the report was going to be so they could close on this Friday. Keep in mind; I only inspected it “on Friday”. I assume that the person expects me to work the weekend and on a 24/7 work schedule.

Although each of us doesn’t have a crystal ball, I feel this coronavirus/pandemic is going to get much worse. The federal government did not take it seriously early on.

FAIL TO PLAN PLAN TO FAIL.  As of this writing, it appears it has only taken China about 3 months to rebound from this. In addtion, research how South Korea has approach this pandemic from their experience with SARS. Here in the United States, it will take a lot longer; I am sorry to say.

Be careful out there and take the necessary precautions and use common sense; everyone, that is something in our control.

Closing Thoughts

Time will tell, if only we really could have 2020 vision for the next decade.

For more information about Coast Appraisers LLC or a quote please call or contact us via email at:
Our fax number is 732.612.1441

Thank you
Kevin McDonald
President, Coast Appraisers LLC.

Happy New Year – Do you have 2020 Vision?

We are in a New Year and a New Decade. The start of a new decade is an exciting time.

There are as many questions as there are some unknowns:

  • How will the US economy react to the presidential elections coming up this November? Where are the interest rates going? Maybe negative interest rates are on the horizon?
  • The inverted yield curve which appeared last year. Will it still be here this year?
  • The trade tariffs have been in place for a while; the effects from them are starting to surface.
  • The current administration still has not acknowledged a recession. We will know soon if it is here.
  • The current administration will do whatever it can to make everything appear to be rosy in the US this year.
  • The housing trends are changing for the millennials they are deciding to shift from renting to buying. The baby boomers are staying in their houses longer and are moving.
  • Overall the real estate trend is on a holding pattern if you are renting or own your property. Are you staying put? This means less real estate transaction and less appraisal work.
  • What will be the long term prognosis for brick and mortar stores and shopping malls. The landscape of internet (online) shopping has been increasing, and the delivery time to your door has decreased.
  • Over the next few months, it will be interesting to see how the US economy and the Global economy performs.

Closing Thoughts

Time will tell, if only we really could have 2020 vision for the next decade.

For more information about Coast Appraisers LLC or a quote please call or contact us via email at:
Our fax number is 732.612.1441

Thank you
Kevin McDonald
President, Coast Appraisers LLC.

Tax appeals–What you need to know in Monmouth County, New Jersey

In New Jersey, depending on which county you reside in, the deadline to file a tax appeal can vary.

  • Some counties like Monmouth County, the filing date is January 15th, and in the other counties it is April 1st. Before you decide to file a tax appeal, find out which date is correct for your county. In counties where a municipal-wide reassessment has been performed, the deadline is May 1st.
  • The first step you should do is meet with your local tax assessor and discuss the property record card. Make sure all the information on it is correct.
  • If you are not satisfied, then fill out the paperwork for a tax appeal. You will have to provide to the tax board reasons you believe your property is currently overassessed. You will have to supply closed sales that are similar to your property.
  • Some people hire real estate appraisers to prepare an appraisal on the property. Other people hire firms specializing in tax appeals and attorneys. Do not let this keep you from reaching out to your local tax assessor any time during the tax year, before filing a tax appeal to informal discuss your tax assessment.
  • Some towns in Monmouth County, New Jersey, such as Keansburg, will be implementing a revaluation for 2021.
  • The following towns are not in the program-Allentown, Avon-by-the Sea, Belmar, Manasquan, Marlboro, Millstone, and Wall Township.

Remember that in your county with a revised calendar, the notification date may be different.

Here are some suggestions

Remember that in your county with a revised calendar, the notification date may be different. You will need to contact your municipality to find out which applies. All other Monmouth County towns maintain each assessment at current market value by performing a state-approved annual reassessment; therefore, the “permissible range of assessments” within Chapter 123 does not apply.

Stress and pressure on the real estate appraiser

It is interesting how local and state governments are concerned for the police and fire departments and other professions that have stress. They are trying to help these people deal with their stress. There are the unions and local groups there to help them. It is important they have a place to turn to for help.

Below are just some of the typical particulars real estate appraisers have to work through:

  • If you are a real estate appraiser, there are no unions, trade groups, or local groups there for you.
  • The stress and pressure we are under are simple; we deal with the public. You have the homeowners demanding we be at the house at a certain time.
  • The real estate agents want us to be there at specific times. For example, the home inspector will be at the house from 12 noon till 3 pm on Tuesday. It is expected of us to be there.
  • The stress of trying to accommodate everyone’s schedule is not easy. The lender expects us to get the report back in 48 hours.
  • If there is a value issue, and the property is under appraised, everyone starts to pressure you to raise the value. The homeowner tells you their property is worth more based on their needs.
  • The real estate agent will provide you with additional comparables that are much larger and do not make sense. The lender is on your back to respond with the 50 sales their AVM (automatic value model) report provided.

All of this must be accomplished in 24 hours, or else you get reprimanded. As you can see, this is a perfect example of the kind of stress and pressure real estate appraisers can expect.

Recently I received a call from a real estate agent at 8:30 am on a Friday, and she wanted to go that morning and check the work was completed on the house. I explained to her I am in my office getting ready to go out for appointments. I will try to be there that afternoon. I was able to rearrange my schedule; I was there at 2 pm. I drove an hour out of my way to accommodate her and the buyer. I get there, and the buyer meets me and starts to give me a hard time about the repairs on the house. I explain that the lender requested it. Nothing I said was right; I was the one holding up the closing. I did not need this stress from them, and now I have the lender pressuring to sending in the report so they can close. They expect me and demand that I work through the weekend who needs this stress.

We are under the federal mandate, and every week they want to change the rules of this profession. They want us to work faster and harder for less money.

The profession is dying. The median age of appraisers is close to 60 years. New people do not want to enter to work long hours for low pay and no benefits. They are always coming up with new report types and raising the bar of excellence. It makes it very stressful, and stress in the profession never takes a holiday.

Is the R-word here? – RECESSION

According to the current administration, there is no recession, and there will not be a recession.

The Federal Reserve this year reduced the interest rates twice. Their concern Is the US economy, and the Global economy is slowing down.

Recently the short-term interest rates when out of control for a few days before the Federal Reserve was able to get the situation under control.

The big banks and lenders are predicting the recession will be 2020.
Various economists are starting to predict the recession is on its way.

Wall Street is starting to talk about “The inverted yield curve.” This is causing some buyers to be hesitance with the uncertainty of the future market. Early this year, the Federal government was shut down for 35 days. That affected the US economy. With the trade wars and new tariffs, this is having an impact on the US economy too.
Some countries are talking about doing negative interest rates. I have never heard of this before. Is it possible for this to occur?

There is an interesting article, “setting off a recession with words” by Robert J Shiller. The item is worth reading.

We are in crazy times, and crazy things can happen. In the US, with the elections a year away in 2020. I would think the current administration would do whatever they can to avoid the recession.

At this point, time will tell. I would watch the stock market and the inverted yield curve, the big banks, and the Federal Reserve.

Why be a Residential Appraiser?

I have been in the appraisal field for decades. My brother got me my start in the business. He is a commercial appraiser. He told me to do my best and write an honest appraisal report. Here it is several decades later and so many crisis’s savings and loans, Fannie Mae failure the bogus too big fail crisis and so forth.

I still every day try to do the best appraisal report I can. I make sure it is credible, and the information I have in it is correct and not miss leading. Most people do not realize the responsibly of the real estate appraiser. We are held to a high standard; we are responsible for knowing everything about the market areas that we do appraisals in and we are responsible for what we do not know.

There is no other industry that individuals are held to such high standards and responsibilities.

When you had a high-level, government official who did not know having government information on a personal computer was against the law, no action was taken against that person. With dealing with the public and working with realtors, homeowners, attorneys. Lenders, etc. You have to explain to them why you need the information and the delays in completing the appraisal reports. I have to review the sales contract and make sure the buyers and sellers have signed the contract. I need to see if there are any condition of sales, for example, seller concessions. I must disclose that in my appraisal report. I am not an attorney.

If you are doing a VA appraisal and it is a purchase, you must review the VA escape clause and make sure it is in the sales contract and signed by the buyer and seller. What is interesting is the attorneys involved in the transaction are not required to review it. I am now a loan processor too.

There are delays that are beyond our control. In a recent assignment, the buyers went on vacation, and the sales transaction was delayed, and the lender pressured me to turn the report in faster. Another delay when the homeowner submitted the paperwork for the refinance and can not see me for a month because they had surgery. When I did schedule the appoint, the homeowner wanted me to rush.

They all have unrealistic expectations.

I needed my lawn sprinkler system repaired. I called the lawn sprinkler company, and they told me 3-4 weeks before they could come out. I told them I need them to come out right away. I had to wait several weeks for my sprinkler to be repaired. But for the appraisal report, it must be ASAP.
Wow, I think I may make a career move.

DIY– Do It Yourself (Dangers?)

Do it yourself.! That sounds great, appealing, and the first thing that crosses your mind is I will save money!

So you boot up YouTube, or you watch the fixer-upper shows on television. Now you feel empowered, and you can tackle anything and any project.

I have an example of a DIY project that went wrong. A homeowner has a brick colonial, and they needed the shutters redone. So they did a DIY on the shutters and painted them blue. What is the big deal correct?

The problem is now the house is listed for sale, and no one wants to see the house. I was consulted and asked why isn’t anyone interested in the home? The homeowner was perplexed. “I just repainted the shutters so what is the problem with the house?”

When I saw the picture of the front of the house, the blue shutters jumped right out at me, almost screaming!. If it bothered me. It is going to bother and be a distraction to the next person.

My suggestion was to paint the shutters black and do an open house immediately after that and see what happens. Good luck to that DIY, but do your research of the dangers.

In New Jersey, there have been changes to the construction process where certain things do not need a permit — replacing the roof, siding, etc. When it comes to the kitchen or bathrooms if you only replace what is there and not move any plumbing? No permit is required or town inspection. That sounds great, and the homeowner saves money right. No wrong if that homeowner does not install everything correctly, they can damage the house.

Take a bathroom re-model for example. If the showerhead is not installed correctly it could be leaking behind the wall and create a mold problem.

When they go to sell the house, and the buyer hires a home inspector, the inspector will point out all the things that were not installed correctly. That could hold off the sale and may be a deal-breaker. Depending on the township Certificate of inspection on resales may fail it.

Here are some suggestions

Always keep in mind the long-term effects of customizing and moving forward with a DIY project. Understand its ramifications on market value and keep in mind what you think may add to your home vs. what someone else’s view may be.