Lauren Bunting Broker MD & DE

Housing prices increase, but appraisals lag behind

Thursday, September 24, 2020, Lauren Bunting

With “for sale” inventory limited in many price points, sellers may be able to ask more for their home.

But, sellers need to remember that the home will still need to appraise adequately if the buyer is obtaining a mortgage. And, in an improving market, appraisal values may have a hard time keeping up with true market value.

“Anytime prices move up fast, the actual appraisal process, because they’re looking back in history, not forward into the future, they are lagging behind,” Lawrence Yun, chief economist at the National Association of Realtors (NAR) said. “From the buyer’s perspective, it’s a tough situation where they want to rely on the value of the home, on the appraisal, yet they know that if they decide to back away there are other buyers waiting to pounce.”

In many cases, the homebuyers most affected are the younger, first-time buyers because they are mortgage dependent.

And, many first-time buyers use low down-payment loans, which tend to have stricter underwriting standards and also stipulate that the appraisal price cannot be any less than the contract price.

When appraisals come in even the slightest bit under the contract price, the mortgage financing can fall through.

In addition, reports of delayed appraisals and rising appraisal costs have been more prominent as the market has improved and sales have increased.

Demand for appraisals comes not only from home sales, but also refinances. NAR research has reported that appraisers median age is close to 55 and as a result, a big wave of retirements is expected in the next 10 years.

The Appraisal Foundation (AF) maintains records of the number persons who pass the National Uniform Licensing and Certification Examinations (NCLUE) exam each year. This exam is required before an appraiser can practice.

In 2008, 2,087 people passed the exam but that figure fell to an average of roughly 1,000 from 2010 to 2014, before bottoming at 662 in 2016. In 2019, the average is approaching 1,000 again with 987 people passing the exam.

Lauren Bunting is a Broker with Keller Williams Realty of Delmarva in Ocean City, Maryland.

Go Back

Thank you so much for all of your hard work. We are so excited to move into the perfect house for us, and couldn't have done it without your guidance.

Megan and Brandon Cater

My friend was right, you are the hardest working realtor, bar none. I honestly don't think that I would have gotten through this house selling process without you.

Brenda Burbage

Lauren made first time homebuying extremely approachable, and took the time to educate me on everything involved in the process.

Amanda Hanke and Keri Swigert

Thank you for all of your hard work and dedication that made this purchase possible. You advocate for your clients and I highly regard you for it. You made it possible for me and my family to achieve our goal of homeownership.

Tom Harutyunyan

Thank you so much for the very wonderful, professional job you did with selling our property. You will always be special to me.

Penny Carley

We want to say a sincere "Thank You" for all you've done for us! We know at times the road seemed never ending. Thank you for always staying positive even through our ups and downs of this process. We appreciate all you do!

Mike and Patty Locke

Lauren's extensive knowledge of the local real estate market proved to be invaluable during the purchase of our first home.

Allison Shockley and Patrick Molloy

Lauren is very easy to work with. She has helped me sell and buy homes in the area and has always been hard working and professional.

Jennifer K. Leggour

Lauren went through tremendous lengths to look out for us every step of the way all the way to the very end. If you are in need of a real estate agent who will treat your transaction as if it were their own and provide you with nothing less than A+ service you will be in good hands with Lauren.

Shireen and Mark Ambush

We were referred to Lauren by a good friend, and we couldn’t have been placed in better hands. Lauren went above and beyond in every way, throughout the entire process.

Liz Young

Lauren Bunting was our realtor when we recently sold two homes- one in Maryland and the other one in Delaware. To say we were very satisfied with all she did for us is an understatement!

Janet and Bruce Lathbury

MLS Disclaimer


Top
Contact Me
Realtor logo   Equal Housing Opportunity logo