Betsy Soderlund wants the emotional roller coaster that is the Minneapolis real estate market to be less like the cork screw and more like the flume. – @betsysoderlund
This Twitter post last night sums up what many people in the real estate market are feeling right now. Things seem to be going up, down, left, right and twisting all at the same time. This is a list of the items I currently see as affecting everyone’s psychological health in the real estate market today:
- I’ve talked at length about this here… ’nuff said
- Fewer appraisers today than in year’s past
- Large refinancing boom creating huge demand
- Appraisals can take 1-3 weeks to complete
- New appraisal rules add another layer of bureaucracy to the process
- Appraisers are required to be much more detailed and precise in their appraisals, causing them to take much longer.
- Some appraisals come in too low… often because the appraiser uses foreclosures and short sales as comps but makes very little adjustment for condition and sale distress, making apples and oranges look all like oranges on an appraisal.
- Underwriters were also trimmed in recent years
- Underwriting guidelines continually are changing
- Underwriters look at everything with a fine toothed comb
- Underwriting can take a week longer than in the past
- Underwriters sometimes come up with more requests a few days (or hours) before the closing
Title Work/Title Companies
- Nearly all title companies reduced staff in the last 48 months to take into account the significantly lowered demand. Now that closings are up 20% over last year, many find themselves overworked.
- Title companies that sprung up during the “boom years” didn’t always do a good job on the paperwork (filing payoffs, clearing title) and consequently the current title company has to clean up their mess.
- There seems to be more emotion on both sides of the table
- Buyers are stressed about rates & qualifying
- Buyers don’t want to “overpay” and are seeing/reading/hearing a lot of different things and can’t extract the gold from the ore
- On the sell side, there are so many different types of sellers with so many different motivations: traditional, short sale, foreclosure, relocation, investor, etc
- On the buy side, there’s increased competition for far fewer homes than last year
- The best priced houses get an offer in the first 60 days on market
- Rates have been bouncing around like crazy in the last week or two. I’ve seen quotes for 4.5% and 5.5% in the span of one week for the same loan type!
- We’ve got local numbers, national numbers, numbers tracking the same thing but reported differently by 2-3 groups
- Some say the bottom is here, some say the bottom is near, some say the bottom is far ahead… yet none of them agree on what a bottom is defined as.
It’s an interesting time in the real estate market today… don’t you think?