Home appraisers: Don't blame them for market

Ask builders, real estate agents, or mortgage brokers why the housing market continues to occupy a basement apartment, and the word appraisals comes up a lot.

As in appraisals done by people unfamiliar with the neighborhood in which a house is located. And increased use by lenders of appraisals generated by computer rather than by licensed professionals. Those were just two "common" problems raised by a panel discussing appraisal issues at a November gathering of the National Association of Realtors in Anaheim, Calif.

Foreclosures and short sales, in which lenders agree to accept less than is owed on properties, now are the predominant form of transactions in many markets and also are throwing off appraisals. Such homes often sell for about 20 percent less than others in the same area, which can make accurate valuations more difficult, members of the discussion panel said.

The Realtors' group noted that a survey of members late last year found that 18 percent had sales contracts canceled because of appraisals that did not come up to snuff with lenders.

Do not shoot the messenger, responds the group representing appraisers nationally: Low home values are not appraisers' fault, the group says.

"The fact is that appraisers are undertaking the same thorough research and thoughtful analysis that they always have in order to continue producing reliable, credible opinions of value," said Sara W. Stephens, president of the Chicago-based Appraisal Institute, which has 23,000 members in 60 countries.

Stephens called the finger-pointing at appraisers by real estate agents and builders "nonsense."

"Appraisers don't set the real estate market; they reflect what's happening in the market," she said. "Obviously, the market is depressed - home prices have fallen far below the values of a few years ago. Many homes simply aren't worth what their owners think they are."

Mark Zandi, Moody's Analytics Inc.'s chief economist, said that while low appraisals have impeded home sales and a housing recovery, this is "steadily less so."

"House prices are more stable in most parts of the country, and distress sales have leveled off, making it easier for appraisers to get a better fix on market prices," Zandi said.

Most appraisers "do a good job and are knowledgeable in the areas they work," said broker Jerome Scarpello, of Leo Mortgage in Ambler.