IS it a "Buyers Market"?

I don't think we ARE in buyers market - It's something else (certainly not a sellers market).  I think it is a stagnation market: where the buyers are not there, and they may not come back in adequate numbers until prices reach affordable levels. 

Soon the evidence will be clear that prices are dropping and the "Press" with report such vigorously (the news now is that the inventory is high and sales are slow).  Once it becomes common knowledge that homes are losing value - the potential buyers will sit on the sidelines and not return to the market until they believe prices have stablized or are starting to move up again.   

The problem with loan officers pushing to make loans - is that they don't care (and are not held responsible for bad loans they make) - they just want to make loans (and collect their commissions).  The people trying to refinance now are doing so for the "cash out", not for better rate and terms.  Then you have appraisers slow with work - willing to help out - as long as they can collect an appraisal fee. 

A 3-D situation:

1. desperate homeowner,
2. desperate loan offiicer and
3. desperate appraiser. 

Who gets hurt when the loan goes bad?  Whoever is holding that loan when it goes bad - that is why there is Cert 23 - informing the appraiser that successors and assigns may rely on your appraisal report.  The borrower who has been allowed to over-extend themselves and loses the house to foreclosure - causing credit problems into the future.  And the appraiser whose inflated appraisal sits in the loan file.  Does the loan officer who put together the deal - seeked out the agreeable appraiser - and hinted to the borrower that over-stating their income would help the loan get funded - be held accountable: NO! 

The Lemmings are in line and headed toward the cliff - the wise appraiser needs to stop and say - this is not a good idea.  Unfortunately the pressure will not slow anytime soon and more appraisers will move to the dark side just to keep food on the table.  The end result (I hope) will be the licensing and standards for loan officers.  But by then there will be many dead lemmings at the base of the clift - sure hope I don't know any of them (that would make me sad). 

Author: Beverly Bayer, SRA:  Chief appraiser for Bayer Appraisals in the City of Moreno Valley, CA..  Beverly began appraising in 1977 and is a past president of the S. Calif. Chapter of the Appraisal Institute.  Beverly recently wrote an article for Working RE Magazine (July 26, 2006) entitled, "Appraisal Form 'Gotcha' Traps (from an appraiser who knows)."