Category Archives: Mount Kisco

Shortage of appraisers causing home sales delays | Mt Kisco Real Estate

Housing demand is rising rapidly, but a key cog in the wheel to homeownership is in deep trouble. The people most needed to close the deal are disappearing. Appraisers, the men and women who value homes and whom mortgage lenders depend upon, are shrinking in numbers.

That is causing growing delays in closings, costing buyers and sellers money and in some cases even scuttling deals.

The share of on-time closings has dropped from 77 percent last April to 64 percent today for loans backed by Fannie Mae and Freddie Mac, according to Campbell/Inside Mortgage Finance. Appraisal-related issues in these delays jumped by 50 percent in that time.

“The appraisal shortage is massive. You’re seeing significant delays, you’re seeing cost increases, you’re seeing rate [locks] expire,” said Brian Coester, CEO of Rockville, Maryland-based CoesterVMS, a national appraisal management company.

Since 2007, when the U.S. housing market came crashing down, the number of appraisers has shrunk by 22 percent, according to the Appraisal Institute, an industry association. With so few new cadets, the current population of appraisers is aging. More than 60 percent are over the age of 50.

Ironically, the decline in new appraisers is largely due to new regulations designed to safeguard both banks and borrowers. They were put in place at the end of 2008 by Fannie Mae, Freddie Mac and the FHA, as the entire mortgage banking community was under strict scrutiny after the financial crisis. They changed the rules that would allow appraiser apprentices to do full appraisals and instead require the licensed appraiser to be on-site for the inspection.

The result is that appraisers no longer see a need to pay apprentices, but at the same time, licensing requirements to become an appraiser include 2,500 hours of appraisal experience to be completed in two years as an apprentice.

“The typical appraiser, he’s going to do approximately 10-15 appraisals a week. For him to be able to take a trainee, he needs the ability for the trainee to go ahead and inspect the property for him,” said Coester. “The rules have changed now, and you cannot do what you used to be able to do 10 years ago, which is hire three to four trainees and really have them go and inspect the properties, go and do work for you and really function as an apprentice. That market has been completely eliminated.”

At 1 p.m. on a Monday in Frederick, Maryland, appraiser Joyce Smith has already valued three homes and is walking into the fourth. A 23-year veteran of the business, she said she has never been this busy.

“I get calls five, six, seven, eight times a day. I used to go far away to do appraisals, but there are so many, I don’t have to go very far anymore,” said Smith.

In some of the nation’s hottest housing markets, where sales are up double digits compared to a year ago, the shortage means searching far and wide for an appraiser.

“We’ve been hearing from our agents in Colorado about significant delays in getting appraisals done,” said Alina Ptaszynski, a spokesperson for Redfin. “Our Denver market manager said for one deal, the appraiser came in from Cheyenne, Wyoming. She reported it taking up to seven weeks to get an appraisal done. Valuations aren’t the concern as much as the delays.”

Valuations are, however, becoming increasingly important, as home price gains accelerate, and competition in the market heats up. Prices could change in the course of two months, the delay time it is now taking in some markets to have an appraisal done. Mortgage rates are also starting to move in a wider range, and that makes rate-locks ever more important. It can cost significant cash to extend a rate lock.

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Construction Job Openings Decline in August | Mt Kisco Real Estate

The count of unfilled jobs in the overall construction sector fell in August, as residential construction employment hiring accelerated in August and September.

According to the BLS Job Openings and Labor Turnover Survey (JOLTS) and NAHB analysis, the number of open construction sector jobs (on a seasonally adjusted basis) fell to 184,000 in August, after establishing a cycle high of 225,000 in July (post-data revisions). The July estimate represents the highest monthly count of open, unfilled jobs since February 2007.

The open position rate (job openings as a percent of total employment) for August was 2.7%. On a smoothed twelve-month moving average basis, the open position rate for the construction sector held steady at 2.9%, near a cycle high.

The overall trend for open construction jobs has been increasing since the end of the Great Recession. This is consistent with survey data indicating that access to labor remains a top business challenge for builders.


The construction sector hiring rate, as measured on a twelve-month moving average basis, ticked up to 4.7% in August.

Monthly employment data for September 2016 (the employment count data from the BLS establishment survey are published one month ahead of the JOLTS data) indicate that home builder and remodeler net hiring continued to rebound, as sector employment increased by 15,700 after posting a 14,400 gain in August. These gains come after a recent period of hiring weakness, which has reduced the 6-month moving average of jobs gains for residential construction to just under 4,000.

Residential construction employment now stands at 2.617 million, broken down as 738,000 builders and 1.879 million residential specialty trade contractors.


Over the last 12 months home builders and remodelers have added 146,000 jobs on a net basis. Since the low point of industry employment following the Great Recession, residential construction has gained 631,000 positions.


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What This Editor Learned About Remodeling | Mt Kisco Real Estate

Energy retrofit remodelers at work in my bedroom.

Craig WebbEnergy retrofit remodelers at work in my bedroom.

Readers: I’m recovering from a remodel, and I’ve been told that talking about it will make the recovery easier. This is the second time my wife and I have made major, debris-raising changes to our home. The first was a whole-house remodel that included a new addition. This time we got a basement-to-attic energy retrofit in our Washington, D.C., home. I’m quite happy with the results, but I can see why the trauma of remodeling has shaken many others. So I’ve come up with seven rules for you to share with neophyte homeowners.

Rule No. 1: Remember, homeowner, that for the length of the remodel, it’s not your house anymore. You need to trust the people you’ve hired to do the remodel or else buy a big case of ulcer medicine.

Rule No. 2: There is no such thing as a dust-free remodeling project.

Rule No. 3: Try to talk your significant other—the one who frets most about neatness, odors, and general cleanliness—into leaving town before the work starts.

Rule No. 4: Far more things in your house can get broken than you could ever imagine.

Rule No. 5: Short of having exit doors on every wall and every floor, odds are good that workers will traipse through­—and generate dirt in—parts of the house that are nowhere near the work zones.

Rule No. 6: Sometime during the remodel, expect that the new crew will reveal to you something done badly by the last people who worked on the house.

Rule No. 7: It always looks irredeemably disastrous before the cleanup begins.

You’d think that spending years as the editor-in-chief of REMODELING, plus that previous experience with a renovation, would have prepared me sufficiently for the arrival of Attilio Manziano-Verrilli, our project manager fromHome Energy Medics, and his platoons of subcontractors. My wife and I spent the prior weekend moving precious objects and trying to anticipate which parts of the house would get whacked and chipped by workers as they hauled equipment up our narrow stairs. I thought we’d done well until I saw a sub unknowingly jostle a $300 pendant light with a 12-foot stud.


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Home Improvements Push Residential Construction Spending Up | Mt Kisco Real Estate

NAHB analysis of Census Construction Spending data shows that total private residential construction spending for July registered a seasonally adjusted rate of $445.5 billion, slightly up from the June downwardly revised estimate.

The monthly gains are largely attributed to the strong growth of private construction spending on home improvements that rose to a seasonally adjusted annual rate of $147.5 billion in July, up by 1.5% since last month. Meanwhile, spending on single-family and multifamily both declined in July. Single-family spending edged down to $238.1 billion in July, down 0.2% over the revised June estimate. After hitting the record-breaking highs earlier this year, multifamily spending decreased to $59.8 billion, down by 0.6% since June. On an annual basis, however, multifamily spending increased by 19.8%. Single-family spending was also 1.7% higher since July 2015.

The NAHB construction spending index, which is shown in the graph below (the base is January 2000), illustrates the strong growth in new multifamily construction since 2010, while new single-family construction and home improvements spending have drifted upward at a more modest pace. NAHB anticipates growth for new single-family spending over the rest of 2016, consistent with the modest rise in single-family starts.


The pace of private nonresidential construction spending rose 1.7% on a monthly basis, and was 7.1% higher than the July 2015 estimate. The largest contribution to this year-over-year nonresidential spending gain was made by the class of office (30.3% increase), followed by lodging (28.0% increase) and commercial (13.5% increase).


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1 Million Rentals on Craigslist | Mt Kisco Real Estate

Craigslist, with its drab gray interface and homemade classifieds, has become the single largest information exchange about the rental housing market in the United States. Its digital bulletin boards have everything: apartment porn for places you’ll never afford, weird fish-eye photos by amateur landlords, queries for every conceivable living space from a spare bunk to a full-sized mansion.

The site touches both the high and low ends of the market — the mom-and-pop operation and the professionally run high-rise — across hundreds of locations. And so Craigslist effectively has more pricing information than commercial providers of rental data do — and offers a more real-time look at the housing market than does the Census Bureau.

“We were looking for something more comprehensive, fresher in time, and smaller in spatial scale,” said Geoff Boeing, a PhD candidate in the Department of City and Regional Planning at the University of California at Berkeley. “Craigslist seemed like an obvious candidate.”

Boeing and Paul Waddell of the Urban Analytics Lab at Berkeley scraped millions of listings off the site from the summer of 2014. The data they sorted, described in new research — and mapped below — reveals some familiar patterns: New York, the Bay Area, Boston and energy-booming North Dakota have the highest median rents on offer in the country (in the map, red is the most expensive per square foot). And many of these same markets have a paltry share of listings at price points that would be affordable to moderate-income households.

But the data also gives a fascinating look at the whole spectrum of offerings in each Craigslist market. In this graph from the research, each line represents a single metropolitan area, with its distribution of listings ranging from the cheapest at the left to the most expensive at right ($4 per square foot would be the equivalent of a 1,000-square-foot rental for $4,000 a month, which is not uncommon in New York). The lines peak at the most common per-square-foot price point in each area. As with the above map, the markets with the highest median rents are red; those with the lowest are blue and purple:

That picture shows that affordable cities have more compressed rental markets on Craigslist, while the distance between high- and low-end units in expensive cities is much wider. Detroit is narrow and spiky. New York is low and stretched out. Detroit’s pricey units are not that pricey, and that segment of the market is much smaller.

Put another way: If you have a little extra money to spend on rent in Detroit, it will get you a lot more than in New York, bumping you from near the bottom to the top of the market more easily.

In the Bay Area (which Craigslist defines much more broadly than just the city of San Francisco, encompassing San Jose, Santa Cruz, Oakland and outlying suburbs), there are hardly any units available at the per-square-foot prices that cover most of the Atlanta-area market:

Across all these places, the correlation is striking between the typical rent in a given market and the degree to which the market is compressed.

“We didn’t know what the pattern would look like,” Boeing said. “We didn’t expect it to be so clear.”

This pattern also illustrates why moderate-income households — and even middle-class ones — have such a hard time finding affordable units in expensive cities. There just isn’t much on offer at cheaper prices. And this pattern implies that a subsidy like housing vouchers in low-cost cities may have a lot more power to lift the poor into higher-quality units and safer neighborhoods.

These pictures are not perfectly representative of the entire rental market in each region. Like census rental data, which lags in time, and commercial data, often drawn from large apartment buildings, Craigslist has its limits as a window into the housing market. It may exclude landlords uncomfortable with the Internet (or who believe their potential tenants might be). It captures only asking prices, not agreed-upon rents, so it doesn’t reveal the effect of bidding wars that might drive up rents in high-cost cities.

And the quality of the data is better in some markets than others. The listings in Seattle and Los Angeles, Boeing and Waddell found, tend to have more complete information. In Chicago and New York, listings are more likely to be posted multiple times. New York’s rental market is alsoheavily influenced by brokers, meaning units are less likely to wind up on Craigslist.

Boeing and Waddell originally scraped about 11 million listings off the site, covering everything posted in all the U.S. sub-domains between May and July of 2014. But by the time they deleted duplicate listings and inevitable Craigslist spam (“Apartment of $1!”), and sorted for only units with clear price and square footage data and geolocation, they were down to about 1.5 million listings nationwide.


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Inventory update | Mt Kisco Real Estate

When we publishedWill Sellers Step up the Plate in 2016? “two weeks ago December market report weren’t in yet and it was clearly too early to blow the bugle over the inventory picture for the coming season

The reports are now in and hands are reaching for the nearest brass instruments.  Too many signals from too many sources are not looking good, especially for the mid to lower tier entry-level homes that Millennials need to escape the Rent Trap.

“Insufficient supply levels” is how NAR’s Lawrence Yun characterized the inventory picture when he released December existing home sales.  The headlines last week.  His careful choice of words masked the very serious possibility that inventories at the outset this year could be worse than last or even 20013 when shortages erupted in bubbles across California.

Here’s a quick review of the latest:


NAR Traffic Report

Seller traffic was broadly “weak” across most states in December, as measured by Sentrilock, the leading lock box system.  Seller traffic was reported to be “strong” only in North Dakota where much residential construction took place as builders anticipated strong housing demand in the wake of the boom in oil production. There was also “very strong” selling activity in Puerto Rico, where significant out-migration is taking place, given the economy’s financial woes.2016-01-25_12-07-38 

NAR Existing Home Sales and Realtor Confidence Index

Total housing inventory at the end of December dropped 12.3 percent to 1.79 million existing homes available for sale, and is now 3.8 percent lower than a year ago (1.86 million). Unsold inventory is at a 3.9-month supply at the current sales pace, down from 5.1 months in November and the lowest since January 2005 (3.6 months).

Nationally, properties sold in December 2015 were typically on the market 58 days compared to 66 days one year ago.  Fewer days on the market are an indication that inventory remains tight. Short sales were on the market for the longest time at 86 days, while foreclosed properties typically stayed on the market for 68 days. Non-distressed properties were typically on the market for 57 days. Nationally, approximately 32 percent of properties were on the market for less than a month when sold.


Active inventories on Zillow in December fell by 7.7 percent from December 2014.  Listings on the site dropped from 1,6012,255 to 1,477,330 (SAAR).

December median age of inventory was 94 days, which is up 12 percent from November but still down 6 percent year-over-year.


Last month (November) prices spiked due to a dearth of properties on the market. In December, there was a three-month supply of homes for sale, a steep slide from the 4.1 months reported in November. The lack of inventory supported a fast market, where the typical home sold in 41 days, a week faster than a year ago.  December listings fell 10.3 percent from November and 5.4 from December 2014.


Source: Re/Max


The inventory of homes for sale remains very tight in many metros across the country, at a level that is 14.2% lower than December 2014. At the rate of home sales in December, the national Months’ Supply of Inventory was 4.9, down from 5.7 one year ago. A 6.0 months’ supply indicates a market balanced equally between buyers and sellers. The number of homes for sale in December was 12.5% less than in November and 14.2% less than in December last year. The average loss of inventory on a year-over-year basis for 2015 was 12.2%. The highest month supply was seen in Augusta, ME at 14.1 months.  Three metros had a supply less than 2 months, San Francisco with 1.1, Denver, CO 1.8 and Seattle at 1.9 months.


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Mortgage applications rise again | Mt Kisco Real Estate

Mortgage Applications in the United States is expected to be 0.98 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Mortgage Applications in the United States to stand at 0.48 in 12 months time. In the long-term, the United States MBA Mortgage Applications is projected to trend around 0.48 percent in 2020, according to our econometric models.

United States MBA Mortgage Applications


New Study Suggests MLS Sold Prices are Inflated in Down Markets | Mt Kisco Real Estate

Transaction prices reported by multiple listing services may differ by an average of 8.75 percent from sold prices reported on HUD-1 settlement statements, possibly because brokers are under pressure to inflate prices in a declining market, according to a new study by three real estate economists at Florida Gulf Coast University published last month by the Appraisal Journal.

In residential appraisal assignments, appraisers often place heavy reliance, at least as a starting point, on multiple listing services (MLS) for property information and transaction prices.Errors will almost inevitably find their way into large databases, and an MLS is certainly no exception. The purpose of this study is to examine the prevalence and magnitude of differences in MLS-reported transaction prices compared to their associated HUD-1 (HUD) Settlement Statements, said the article..

The study found MLS errors are related to market conditions, not property price levels, and are likely to be smaller during a market boom and larger during a market bust.  The study found that MLS-reported prices supplied by brokers on or after the settlement date overstated HUD-reported prices in 6.25% of the sample and understated HUD-reported prices in 2.50%. The data used in the analysis were drawn from the two years before, the year of, and the two years after the market peak between 2004 and 2008.  The study compared HUD-1 and MLS prices from a sample of 670 HUD-1 Settlement Statements obtained from two banks operating in a Southern state.

2016-01-19_9-41-34Source: “Reported Price Errors:A Caveat for Appraisers” in The Appraisal Journal

“This finding is consistent with, but certainly does not prove, the notion that if brokers are motivated to inflate MLS prices, pressure to do so is likely to be greater in declining markets. However, there may be other explanations for the price discrepancies. One such explanation is the possibility that during declining markets, brokers may report initial contract prices that may be subject to downward adjustment between contract and settlement dates. A related possibility is that some prices are renegotiated at the time of closing to accommodate buyers’ cash needs. Regardless of explanation, however, the result is a misstating of price,” the authors concluded.

The study urged appraisers to use other sources in addition to MLS transaction prices to verify reported sale prices, especially when a sale price contradicts sale prices of comparable properties.


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Existing Home Sales Weak Despite Good Job Numbers | Mt Kisco Real Estate

Sales of existing homes weakened at the end of 2015, despite ongoing good news for job creation. According to estimates from the National Association of Realtors (NAR), the seasonally adjusted volume of home resales declined 10.5% from October to November and were 3.8% lower than a year prior. This marked the first year-over-year decline since September 2014. However, much of this decline was attributable to new mortgage disclosure rules from the Consumer Financial Protection Bureau that likely resulted in delays for some sales.

Similarly, the NAR Pending Home Sales Index, a forward-looking indicator for home sales, declined in November. This was the third decline in the last four months; however, the index remains 2.7% higher than a year ago.

In contrast, new home sales posted a small increase in November, rising 4.3% from a downwardly revised October pace to a 490,000 annual pace. On a year-to-date basis, new home sales were 14.5% higher than for the first 11 months of 2014. Builders are also adding to inventory with rising demand. New home inventories rose to 232,000, the highest since January 2010.

Strengthening job creation should continue to promote home building activity in 2016. And the December Bureau of Labor Statistics report offered positive news. The economy produced 292,000 more jobs for the month, plus an additional 50,000 jobs recorded due to upward revisions for prior months. The unemployment rate held steady at 5%.

The residential construction industry – home builders and remodelers – added 23,100 jobs in December after a cycle-high job gain set in November (31,500). These two months followed a period of lackluster employment gains for the sector. The overall construction industry continues to see elevated levels of unfilled jobs, as does the economy as whole.


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Why you might retire to a tiny house | Mt Kisco Real Estate

Last year, 66-year-old Lauren Knoblauch sold or donated nearly everything she owned, from her two-bedroom home on a suburban Seattle lake to her furniture and many of her clothes. She moved everything else, two small carloads’ worth, into her new home: a downtown apartment that, at less than 150 sq. ft., is smaller than the average U.S. master bedroom.

The move came as Knoblauch, who works in inmate rehabilitation, pondered her impending retirement. “I started thinking about what I was passionate about,” she said. “I wanted to see opera in Europe, to spend money on what was exciting to me.”

Her new apartment, which costs $575 a month — less than half the $1,400 average for a Seattle one-bedroom — puts her about 20 minutes from Symphony Hall by foot and a short bus ride from the Opera House. With new financial flexibility, she’s traveled to Germany and Ireland to see opera performances. “I’m loving it,” she says.

The burgeoning tiny house and micro-apartment movements, which generally describe accommodations smaller than about 400 sq. ft., are sometimes seen as young person’s trends, with budget- and environmentally conscious millennials and Gen Xers seeking to slash living costs while lessening their environmental footprints. Some familiar with the industry, however, say they are increasingly of interest to older people at or nearing retirement age.

About 10,000 people live in tiny houses in the U.S. — the Pacific Northwest, Colorado and the Carolinas are particularly popular areas — though just a fraction are older; many more people, especially those in expensive cities, live in micro-apartments, according to Ryan Mitchell, owner of the website TheTinyLife. Their numbers are growing, he says, as modifications that make the homes more accessible to older residents, such as staircases rather than ladders and designs that keep everything easily reachable, become more commonplace.

While their appeal is varied, the principal attraction is price. Smaller homes can give seniors “more disposable income and the ability for many to comfortably survive within their Social Security means and/or part time work,” says consultant Erik Blair, a tiny house advocate. “The number one reason to get into a tiny house: You can save 70% or more of your recurring cost of living.”

Why older Americans want to retire in tiny houses

For older Americans, many on fixed incomes that may not heavily supplement their Social Security, the cost of living is of utmost importance. Nearly 60% of workers 55 and older have saved less than $100,000 for retirement, while 24% have saved less than $1,000, according to the nonprofit Employee Benefit Research Institute. Both figures are much lower than financial advisers recommend.

Enter tiny houses, which are relatively inexpensive to build, buy and maintain. It usually costs between $10,000 and $100,000 to buy or build one, according to Blair; the average U.S. home costs nearly $200,000. Tiny apartments tend to cost much less than larger rental units in the same area.

In both cases, less space means lower utility payments: Mitchell, who lives in a 150 sq. ft. home, says his average monthly bills are around $20.

Less storage space, meanwhile, can reduce the impulse to acquire new stuff because, simply put, there’s nowhere to put it. “When I want to buy something, I have to think of what can I get rid of,” said Knoblauch. Often, “I realize I have everything I need already.”

“There are no big trips to Sam’s to get tubs of ketchup,” joked Kerri Fivecoat-Campbell, 52, who lives in a 480-square-foot home in the Ozark Mountains in Arkansas, where she plans to retire, after years in a larger house in suburban Kansas City, Kan. “They won’t fit.”

Money isn’t the only reason tiny houses and micro-apartments appeal to retirees. Many empty nesters long to downsize, surveys show, even if they can afford more space. With their children grown, extra rooms can attract clutter and require maintenance; some, anticipating an eventual move to a nursing home, like the idea of simplifying early.

“I used to spend an entire Saturday cleaning my house,” said Fivecoat-Campbell. “Now I can clean it top-to-bottom in under two hours.”

For still others, the houses allow them to live near family while retaining their own space. So-called “granny cottages” can be placed in the yard of a family’s home, allowing residents to live both independently and close by. They’re often fitted with amenities useful to older residents, including grab bars, barrier-free showers and elevated toilets that can reduce falling risks, and wheelchair access.

‘I love this place — life works’

Tiny-house living isn’t without challenges. Knoblauch doesn’t have a full kitchen or bathtub; she has just one sink; and her clothes hang on a free-standing rack rather than in a closet. Fivecoat-Campbell wishes she had space for her now-deceased mother’s china cabinet and other full-size furniture.


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