Appraisal Scoop

Market Challenges - Adopting an Offensive Playbook

GUEST POST:  Sally Carothers, SRA, FRICS, Chief Appraiser, CU Appraisal Services, LLC. Founding board member of the Ohio Coalition of Appraisal Professionals (OCAP)

As we move towards the middle of 2013, there are there are several key economic indicators to demonstrate appraisers must once again face the challenge of changing markets.  Home prices are on the rise. But are appraisers ready to embrace the challenge and recognize that real estate markets have finally turned? Of more consequence, can appraisers be certain that this housing market is sustainable?

Last week, CU Appraisal Services LLC (CUAS) hosted two roundtable meetings attended by 70 appraisers from 6 states to discuss changing markets.  The discussion focused around the Realtors Confidence Index for April 2013. [1] Today, Realtors are reporting rising prices and shorter days on market.  

Data released by S & P Dow Jones Indices for its S & P/ Case-Shiller Home Prices Indices showed home prices had strong gains in the first quarter of 2013. [2]  The 20-city S & P Case Schiller House price index for March 2013 climbed 10.87% on the year. This is the fasted pace increase since April 2006.  On the month home prices were up 1.12%, above expectations for a 1 % rise.

Below is look at the 10 and 20-city home price index since 1988:

Despite obvious data to the contrary, appraisers are still wary of recognizing increasing price, under supply and shortened marketing times. In fact, 90% of the last 300 appraisals delivered to CUAS included the market overview below:

As appraisers, we are faced with making choices that are uncomfortable. We should refrain from generic form-filling and begin to ask the tough questions. Is property value increasing in our market and if so, is this increase sustainable? What are the current inventory levels and how is that likely to impact marketing times. For each assignment we must begin afresh to examine markets, as of the effective date of the appraisal. In short, appraisers must refrain from defensive appraising. Starting now, we must look through the windshield and limit watching the rear view mirror. Analysis and reconciliation must become the cornerstones of a credible market value opinion.

Now is the time to begin a dialogue of value sustainability. Is this merely a spring/ summer price bubble? As appraisers it is important that we research and communicate. We should be interviewing market participant and building relationships with Realtors, builders and other real estate professionals. Appraiser independence regulations protect us from pressure and give us the freedom to build these networks for better business and more accurate analysis. We must collaborate with other appraisers, join organizations, state coalitions and physically attend seminars and education events.

"As appraisers, our jobs are not merely to inspect and report but analyze and reconcile. Only then will we gain respect as professionals"

As appraisers, our jobs are not merely to inspect and report but analyze and reconcile. Only then will we gain respect as professionals. If inventory levels are low, good comparable sales are limited. We must therefore discover how to use the ones we have well. This means we make supported adjustments for key elements of comparison using recognized methods and techniques. We cannot rely on “experience and intuition”. It is time for us to revisit our tool box and begin using the skills we learnt in the classroom: matched pairs; regression analysis; market extraction; modified age life; highest and best use analysis among others. Our clients, intended users and consumers will respect the due diligence and realize the worth of our product.

Appraisers must now break out of the box our clients, the secondary market and traditional AMCs have put us in. We have fought and won many battles over the last few years: appraiser independence; customary and reasonable fees and AMC registration. Now, we must prove we are the leaders and experts in real estate value.

I challenge all appraisers to re-examine their appraisal practice. How will you be seen forensically in years to come? What will be your legacy? Now is the time to shake the cobwebs of the offensive playbook and look forward with courage, knowledge, integrity and expertise.

Sally Carothers, SRA, FRICS

Chief Appraiser

CU Appraisal Services, LLC

Phone 866-787-5111

Fax - 866-787-5112

Email - [email protected]

 

 

[1] Realtors Confidence Index. Report and Market Outlook. April 2013 Edition. Based on Data Collected April 29 through May 6, 2013. National Association of Realtors.

[2] S &P / Case-Shiller Home Prices Indices-May 28, 2013

The (potential) fiction of the Sale Price/List Price [SP/LP] Percentage

GUEST AUTHOR: Dave Towne, Certified Real Estate Appraiser - Towne Appraisals.  16422 Britt Rd., Mount Vernon, WA  Phone: 360.708.1196   eMail: [email protected] Web: http://www.TowneAppraisals.com

On the FannieMae/FreddieMac Market Conditions (MC) Form there is an entry for the ‘Median Sale Price as % of List Price’ at the bottom line of the top grid section.  In other parts of a report, clients and lenders often ask appraisers to use this SP/LP percentage to ‘adjust’ listings to predict the eventual sale price.

So what is that percentage anyway?

The SP/LP percentage is a sales and marketing scheme designed to show how close a Sale Price comes to the List Price of a property.  The math is simple: Sale Price divided by List Price, converted to a percentage.  On the surface, acceptable.   However, it’s not really useful for market statistics if it’s not done correctly. 

If inaccurate, what good is it?

If it’s not accurate, or is calculated improperly, and an appraiser uses the inaccurate percentage to
justify market evidence or make an adjustment, then you have potentially violated USPAP by producing a report (or at least part of one) that is not credible.

The rub comes in the methodology used by the various MLS systems around the country to calculate the SP/LP%.  Some of the private ‘MC Form’ generating spreadsheets that are based on MLS info automatically downloaded to the spreadsheet worksheet are based on the ‘most recent’ List Price, not the Original List Price.

The first dirty little secret is most MLS systems base the SP/LP% on the ‘most recent’ List Price verses the eventual sale price.  The % is fine if there has been no List Price change during the listing period, or no re-listing after its Original List Date with a different List Price.

The second dirty little secret is that most often MLS systems track the Days on Market from the ‘most
recent price change date’, not the Original List Date.  (Thankfully the Northwest MLS serving my area is a bit more honest.  Any re-list using a new listing number within 90 days has the original listing added to the new listing – to show the Original List Price, and the Original List Date in the listing to compute the CDOM.  However, they calculate the LP/SP% from the ‘most recent’ List Price.)

The third dirty little secret is the fact many agents are in on the ruse.  Some will re-list a property within a short time of original expiration using a slightly different street address to try to fool the MLS tracking system.  This helps them ‘puff the numbers’ to their benefit.

If a MLS system does not track and report the Original List Price based on ENTIRE days on market
(typically named CDOM – Combined Days on Market) as of the Original List Date, but only tracks the ‘most recent’ List Price, you will probably find that the SP/LP% will show a higher percentage figure based on the most recent List Price change.  Similarly, the Days on Market will be shorter.

This SP/LP% percentage figure should be calculated from the Original List Date and Original List Price
instead of the most recent List Price change date.

Unfortunately, if CDOM and Original List Price are not shown on the current MLS listing you may have to
examine the listing history to make the calculation.  But if the info is shown on the listing sheet you use (on screen or printed), then you should use the Original List Price, and also the total (or combined) days on market (CDOM).

Here’s an example of three properties from a large MLS system:

The inaccurate methodology used by the MLS systems is designed to ‘puff’ the percentage figure and shorten marketing times so that the results look more appealing to consumers and give bragging rights to the RE Agents.  But that does not mean we should use them when doing appraisal reports.  You can see by the examples above that the correct SP/LP% is lower by 3.1% to 11.5%.

When including Listings in reports, this appraiser REFUSES to adjust those for the SP/LP% - because we don’t really know for what price the listed property will sell.  As the example above shows, the percentage is somewhere between 86.8% and 100% - but more accurately 86.8% to 94.4%.  But it could be above 100%.  So what figure should the appraiser use?  I have a statement on the report Listings page that states why I don’t use this percentage figure.  Only one underwriter has ever challenged this procedure – ‘because everyone does it.’  However, when the U/W read my explanation the U/W realized why using the fictional SP/LP% is improper.

Some people will claim that the methods MLS systems use to calculate the SP/LP% using the ‘most recent’ info is more accurate because that demonstrates the “realistic” market at play.  I say boloney.

RE Agents are sales people and advocates for their clients.  They list properties for the price they are told to, or for a price they figure will generate interest.  They try to sell for the highest price possible in order to generate the maximum commission.  In some cases the list price is too high for the current market.  If that’s the case, the Original List Price and Date still become the statistics we appraisers should use.  Again, the examples above prove my point.

GUEST AUTHOR: Dave Towne, Certified Real Estate Appraiser - Towne Appraisals.  16422 Britt Rd., Mount Vernon, WA  Phone: 360.708.1196   eMail: [email protected] Web: http://www.TowneAppraisals.com

FNC Study: How Local Market Conditions Affect Appraisal Valuations

Last month, the Appraisal Institute released “Guide Note 12: Analyzing Market Trends,” a resource designed to give AI members an analytical framework for studying market trends while developing a market value opinion on a property. The Guide Note is particularly concerned with challenges faced by appraisers when market conditions are rapidly changing, as demonstrated by recent boom and bust cycles of the U.S. housing market. In slower markets like today’s, the Guide Note recognizes that a lack of market data is challenging to appraisers attempting to make market value adjustments.

Indeed, appraisers commonly face such challenges and more in today’s markets. Underlying market conditions are far from stable; continued downtrends in home prices often require appraisers to apply appropriate market trend adjustments to recent comparable transactions. Moreover, in many distressed markets it is also likely that some or all available recent transactions are distressed sales. Since the parties to distressed properties are often unique and distressed properties are typically sold at a significant price discount, which may or may not represent underlying market trends, appraisers are challenged with deciding whether such distressed sales are relevant market data for non-distressed transactions or whether adjustments are needed to better extract relevant market information.

In this report, we use a large dataset of recently completed purchase-mortgage appraisals to analyze how appraisal valuations respond to local market conditions, particularly when conditions are prone to produce less efficient transaction prices. It is well known that buyer-seller-negotiated prices can deviate from a property’s market value due to various inefficiencies that exist in real estate transactions. The problem is compounded by distressed conditions that characterize many local markets. It will be generally more difficult to obtain relevant price information in distressed, inactive markets. More actively traded markets, on the other hand, make it easier to observe relevant price information and market trends ─ more likely to result in a more efficient price outcome for the buyer and seller and thus less likely that the appraisal value will deviate much from the observed price

Our results show that appraisal value can differ quite significantly from contract price despite the fact that nearly one in three pre-closing sales transactions appraise at exactly the contract price. Of a sample of purchase-mortgage appraisals on single-family homes and condominiums completed between January and May 2012, about 24% are appraised above contract by 3.0% or more. Combined with another 8-9% appraised at below contract by 3% or more, nearly a third of the purchase-loan appraisals contain a market value opinion differing at least 3% in value from the contracts.

More importantly, our results show that appraisal valuation appears to be performing the important risk management function it is designated to do for lenders’ mortgage transactions: helping to ascertain the fair value of the underlying collateral. Our data reveal a strong positive correlation between indications of market inefficiency and appraisal valuation’s tendency to move away from a contract price; when underlying market conditions are more inclined to produce less efficient transaction prices, there is a greater chance that appraisal value will deviate from the contract price. A statistical probability model is used to analyze how market conditions affect the likelihood that a significantly different appraisal value will be observed. In this study, a significantly different appraisal valuation is defined as one in which appraised value falls below or above contract by at least 3% of contract price.

• More active markets – defined in this study as having at least 10 non-distressed sales in a prior month – are associated with lower probability of observing significantly different appraisal valuation. A more active market makes gleaning information more efficient.  
• Greater market distress – measured by the proportion of distressed properties in total homes sales in the prior three months – is associated with a higher probability that a significantly different appraisal valuation will be observed. More specifically, market distress increases the probability of appraisal valuation falling significantly below the contract price.  
• REO or short sale properties are more likely to be appraised at higher value than the contract price. Sellers of such properties are driven to make a quick sale and are typically willing to ask a price significantly below the property’s fair market value in exchange for liquidity.  
• Low-tier properties – contract price below $250,000 – are more likely to be appraised above the contract price. [1] In contrast, high-tier properties (those with a contract price at $1 million or more) are less likely to receive a higher valuation. Since the subprime mortgage crisis is concentrated among low-tier properties, distressed sales are more likely to occur among these properties as their owners fall into financial distress. The short sale is an example of this trend. Since the data we analyze often has missing information regarding a property’s distressed sale status (short sale, REO, or other forms of distress), we suspect the low-tier property indicator picks up such impact on appraisal valuation

However, market-based appraisals have often been criticized for failing to support potential mortgage transactions – especially if the adjustments result in a lower appraised value than the contract price. Our analysis reveals appraiser due diligence in the process of developing a market value opinion on the underlying collateral. Meanwhile, we find the majority of appraisals provide a valuation that supports the contract price. As shown below, the evidence does not support the claim that low appraisal valuation has prevented contract closings. 

________________________________________________________

[1] According to a newly released report from the General Accounting Office, “Residential Appraisals: Regulators Should Take Actions to Strengthen Appraisal Oversight,” the nation’s five largest lenders obtained appraisals for 98% of home purchase mortgages sold to the GSEs or insured by FHA.

 

Source: FNC - Click Here

Source: PDF Release

To interview any of FNC’s mortgage industry experts, contact:
Bill Dabney, manager of public relations FNC, Inc.
Phone 662/236.8304
[email protected]

About FNC, Inc.

Since 1999, FNC has pioneered real estate information technology, automated appraisal ordering, tracking, documentation and review for lender and servicer compliance with government regulations. FNC’s platforms are in production at seven of the 10 largest U.S. mortgage lenders and provide value to large and small lenders with reduced costs and more efficient loan processing. With collateral management platforms, data and analytics, FNC provides advanced insight into the property backing a loan from origination to capital markets. Visit FNC online at www.fncinc.com.

Bradford Technologies Brings Regression Analysis To Residential Appraisals

First appraisal technology to provide statistical analysis for GSE-approved appraisals

SAN JOSE, CA – MARCH 10, 2012 — Bradford Technologies, an innovator of valuation tools and solutions for residential appraisers and parent of the AppraisalWorld online community for appraisers, has announced the redesign of CompCruncher, its valuation technology used by appraisers to prepare statistically supported valuation reports. One of the major changes is that the system now provides regression-based analysis for GSE-approved appraisals. CompCruncher 2.0 is the industry’s first and only appraisal technology to enable regression analysis for the most commonly used residential appraisal forms.

The original CompCruncher produced Collateral Valuation Reports (CVRs), a highly accurate alternative valuation report. CompCruncher 2.0, however, can be used to create Collateral Valuation Reports as well as traditional residential appraisals on GSE-approved appraisal forms. The process of using CompCruncher will remain largely the same. But once an appraiser uses CompCruncher 2.0 to develop a value, he or she will then be offered the option of choosing the type of report to produce: a CVR, the GSE-approved appraisal form 2055, and soon the appraisal form 1004.

CompCruncher 2.0 is currently in beta testing with several lenders and appraisal management companies. Only certified and trained appraisers can use CompCruncher or CompCruncher 2.0 to create statistically supported valuations of any kind.

“Our lender partners have told us repeatedly that they want to bring the level of reliability they get with the CVR into traditional appraisals—that’s why we created CompCruncher 2.0,” said Jeff Bradford, CEO of Bradford Technologies. “Now every appraisal can benefit from the higher accuracy that results from scientific analysis. Values can be determined based on analysis of literally hundreds of properties, rather than a handful of properties—for 100 percent of the appraisals used in the market.”

More than 2,000 appraisers have been trained to use CompCruncher to prepare Collateral Valuation Reports. Working in concert with some of the nation’s largest appraisal firms, Bradford will be offering no-cost training on CompCruncher 2.0 to current CompCruncher users. The company anticipates that in 2012, it will train 5,000 more appraisers to prepare not only Collateral Valuation Reports, but also statistically supported traditional appraisals. The Collateral Valuation Report is being used by several Top 20 banks.

“Values for an entire multi-trillion dollar industry are being supported by 25-year old valuation methods for an appraisal product that today is quickly becoming a commodity. It’s time for our industry to make some serious changes in the way we value properties,” said Mark Linne, the company’s chief strategic and valuation officer. “We need to move away from the art of appraising and start incorporating science. Most appraisal technologies tout efficiency and speed, but accuracy is where we need to focus—and CompCruncher 2.0 has the ability to bring that accuracy into virtually every residential appraisal in our industry.”

About Bradford Technologies, Inc.
Founded in 1987 and based in San Jose, California, Bradford Technologies has long been recognized as the leader in innovative appraisal solutions. Among the company’s offerings are ClickFORMS™ hassle-free appraisal processing software, the AppraisalWorld online community and services portal for appraisers, and the Collateral Valuation Report (CVR) produced by CompCruncher™, the first statistically supported, USPAP-compliant valuation product. Bradford Technologies is dedicated to building trust and reliability in the appraisal profession and providing leading edge solutions for appraisers, appraisal management companies, lenders and consumers. Bradford Technologies is recognized as a Top 50 Service Provider by Mortgage Technology magazine in 2011. For more information, visit: www.BradfordSoftware.com and www.AppraisalWorld.com.

 

Media Contact
Jeri Yoshida
Strategic Vantage Marketing & Public Relations
[email protected]
310.396.8813

How To Value New or Existing Photovoltaic (Solar) Systems for Residential and Commercial Properties

This spreadsheet tool developed by Sandia National Laboratories and Solar Power Electric™ is intended to help determine the value of a new or existing photovoltaic (PV) system installed on residential and commercial properties. It is designed to be used by real estate appraisers, mortgage underwriters, credit analysts, real property assessors, insurance claims adjusters and PV industry sales staff.

For appraisers, the inputs specific to PV in the Appraisal Institute’s Residential Green and Energy Efficient Addendum can be used as inputs to PV Value™. (click here for more information)

Valuing a PV system is done using an income capitalization approach, which considers the present value of projected future energy production along with estimated operating and maintenance costs that are anticipated to occur during the PV module power production warranty timeframe.

This tool was created with Microsoft Excel® 2007, and works with both Excel® 2007 and 2010. Use of this spreadsheet requires activating macros, ActiveX controls and data connections. A detailed user manual accompanies this tool and can be found in the download area below. Sandia Labs hosted a webinar describing PV Value™ on December 7, 2011, which can be viewed at the source site below.

Updates will be made as necessary, with a new version released on or before September 1, 2012. The current version is 1.0.

Please contact Geoff Klise at Sandia National Laboratories with questions or comments related to PV Value™. He can be reached at: [email protected]

PV Value™ v1.0
(zip file 360 KB)

PV Value™ v1.0 User Manual (SAND2012-0682P)
(pdf 1.3 MB)

Please contact Geoff Klise at Sandia National Laboratories with questions or comments related to PV Value™. He can be reached at: [email protected]

SOURCE: http://energy.sandia.gov/?page_id=8047

NAHB House Price 'Estimator' model updated

Economist Paul Emrath of NAHB has updated a model he developed that estimates the value various features add to a home. The updated research paper and estimating tool enables builders, developers, prospective home buyers and home owners to see the impact that various physical features and neighborhood characteristics might have on the price of a home.

Looking at location factors, the updated NAHB tool finds a general tendency for house prices to be higher in the Northeast and West, as well as in central cities and suburbs. Meanwhile, prices tend to be lowest for homes built outside of a metro area, though some regional variation exists regardless of urban status.

Here's an interesting conclusion from the article:

Among other important findings, the estimator reveals that the greatest impact on a home’s value comes from adding a third full bathroom, which boosts the estimated price of a standard new home built in a Southern suburb by about $43,000. Meanwhile, eliminating the fireplace reduces the estimated price by about $24,000.

If you're still adjusting baths at $2,000 and fireplaces at $1,500 . . . You MIGHT want to go back into the market to check those out!!

Source: NAHB

One Cause of the Uneven Recovery: The Home-Buyer Credit - The Atlantic

Housing stimulus programs are history. Home buyer tax credits are water under the bridge. Still, they're part of explanation for why we're where we are, economically speaking, trying to extract ourselves from a funk the likes of which only those who lived through the Great Depression can remember.

Here, the Atlantic's Daniel Indiviglio tries to shed light on the distortive effect of the home buyer tax credit on reisdential investment, and therefore, the economy, by regraphing the quarters and pulling out the stimulus' impact.

 

Indiviglio's chart takes actual

" GDP growth (red) and then imagined what GDP would have looked like without the credit (blue). In my estimate, residential investment dropped to $321 billion in the third quarter of 2009 -- where it fell to when the home buyer credit was removed last summer and has hovered around ever since.

Here, you see that the third quarter of 2009's pop looks a little weaker. But growth looks better in most of the quarters that followed -- especially the third quarter of 2010, during which time the big fall in residential investment due to the credit's expiration cut GDP.

Better home sales would have had some effect on other aspects of GDP as well -- but just like you're seeing here, removing those effects in later quarters would have created an adverse effect."

Like other important economic events, we'll need more history to run its course before we'll be able to say it's positive or negative.

Source: The Atlantic

2010 "Net" Annual Income from Appraisal Related Services Poll by AppraisalPort

 AppraisalPort has posted a new Weekly Poll as a follow-up to last week's.  THIS week, appraisers are asked to respond with how much Net Income they made (income after expenses & taxes).

  

Visit http://www.AppraisalPort.com to vote in the poll and be SURE to read and add YOUR comments below! 

The graph below shows last week's AppraisalPort "Gross Income" survey results (with 5,000 votes cast) from last week.  Check-out how the results compare!

New Instructor-Led Appraisal Online Class - Statistics, Modeling and Finance

New Instructor-Led Online Classes Promote a Traditional Classroom Experience Through the Convenience of a Personal Computer

STAMFORD, Conn., Jan. 26, 2011 /PRNewswire/ -- CompuTaught, part of Cengage Learning and a leading developer of computer-based real estate education, today unveiled a new series of live, instructor-led, advanced appraisal courses that will be offered online via WebEx.

The new online courses feature CompuTaught's standard online registration, administration and learning management support systems while combining real-time instruction with WebEx's synchronous, interactive delivery, bringing a live classroom experience to the student's personal computer. These live, online appraisal courses have gained both International Distance Education Certification Center (IDECC) and Appraiser Qualification Board (AQB) approval and will be delivered in accordance with individual state regulations.

 

With all of the features of an onsite classroom and more, the courses feature a virtual classroom environment with audio, video, screen and document sharing, chat and other interactive elements, with instant access to required course materials. To aid with testing and engagement, the classes also include incremental assessment exams which are reviewed live by the instructors to ensure understanding. Courses include random individual student inquiries throughout the duration to verify student identity and engagement. In addition, students receive information on scheduling the proctored final exam for the course (if required).

"Moving through this digital age, the traditional classroom is shifting and a recent growth in online education is giving us the opportunity to transform the way we teach and deliver content," said Dave Shaut, vice president, CompuTaught. "These new live courses combine the trusted reliability of our computer-based real estate and appraisal education with the convenience of live instruction. We strive to continually evolve with our ever-changing customers and provide them with the most convenient and cost effective ways to work toward their real estate and appraisal education goals."

The NEXT course to be introduced, Statistics, Modeling and Finance, will be offered on Feb. 22 and Feb. 23, 2011.  The course will be led by Certified General Real Estate Appraisers and award-winning instructors Mark A. Munizzo and Lisa Virruso Musial.  This course comes at an important time for the industry, as Bradford Technologies' Appraisal Industry Predictions for 2011 indicate that certified residential appraisers and other real estate professionals are searching for courses on statistics, applied regression and advanced valuation skills to stay current or advance their career. 

Courses are IDECC, AQB and State approved and delivered online via WebEx.   For state specific information, click here http://www.careerwebschool.com/ , THEN click on Appraisal / Continuing Education on the right, THEN select your state.  On the next screen, click on the red "View Online Instructor-Led Courses" button. 

Main Features:

• 50 minute sessions w/breaks, 1hr for lunch
• WebEX with audio, video, and chat
• Textbook: eBook (PDF) and hard copy
• Quizzes reviewed live by the instructors
• Random individual student inquires throughout the course to verify student identity and engagement
• Information on scheduling the proctored final exam for the course, if required
• System Requirements: Broadband to Internet, speakers or headphones

"Many students operate under the false impression that online learning is inferior to a traditional classroom," said Sam Martin, educator, certified appraiser and creator of samthetutor.com. "In fact, according to a recent white paper from the U.S. Department of Education, online courses are just as effective as conventional classroom instruction, proving these new courses from CompuTaught as a convenient and interactive alternative for students who are seeking state approved education."

For more information on the new courses, CompuTaught's Educational Referral Network program or other online or computer-based courses offered, please visit www.computaught.com or www.cengage.com.

About CompuTaught

CompuTaught, part of Cengage Learning, is a market leader in the computer-based real estate learning market. In 1989, CompuTaught was the first in the country to offer state-approved real estate licensing courses on computer and continues to be the leading developer of computer-based education for the real estate and appraisal professions. It currently distributes its courses through more than 300 independent schools, with about 50,000 enrollments annually. For more information on CompuTaught, please visit www.computaught.com.

About Cengage Learning

Cengage Learning is a leading provider of innovative teaching, learning and research solutions for the academic, professional and library markets worldwide. The company's products and services are designed to foster academic excellence and professional development, increase student engagement and improve learning outcomes. Cengage Learning's brands include Heinle, Gale, Wadsworth, Delmar, Brooks/Cole and South-Western, among others. For more information on Cengage Learning please visit www.cengage.com

SOURCE Cengage Learning http://www.cengage.com

Fauxclosure Trends

According to the Hanley Wood Market Intelligence blog and newsletter written by Jonathan Dienhart and Ken Lee :

The most acute challenges facing the housing market as it struggles to stabilize in 2011 are an expected flood in foreclosures and weak employment growth.  Despite reaching a record-high level of activity in 2010, consensus estimates call for foreclosures to rise to new all-time highs again this year.  This is in part because a number of the largest banks suspended foreclosure proceedings in October, causing a backlog in activity.  

According to comprehensive transactional information available in Housing IntelligencePro , total foreclosures (non-seasonally adjusted) in the U.S. fell almost 29% from September to October.  Compared to the same period last year, foreclosures were off 21%.  Just before foreclosures were halted by the banks in October, the number of foreclosures in September hit an all-time high for any month since the beginning of our data series in 2005.  This suggests that foreclosures would likely have remained on the rise if the freeze not taken place. 

On an index scale with October of 2005 being equal to 100, that would put September 2010 foreclosure activity at a rating of 451 (or in other words, 451% of the number of foreclosures seen 5 years ago) and with October 2010 falling all the way back down to 323, the lowest level since April 2009.  Expect to see this recent trend turn again around in the coming months. more...