MONTGOMERY COUNTY EVENTS & LEADERSHIP
MONTGOMERY CO LUNCH
Thursday, May 27
"Lender Panel"
11:30 a.m. at Landry's 1212 Lake Robbins Dr. The Woodlands, TX 77380 Cost: $40/person
MONTGOMERY CO LUNCH
Wednesday, June 23
"Local Appraisals"
11:30 a.m. at Landry's 1212 Lake Robbins Dr. The Woodlands, TX 77380 Cost: $40/person
NO JULY MEETING
INFO/SPONSORSHIPS:
Carrie Saxon-Hampe, (281) 970-8970 x171 or
CHampe@ghba.org RSVP online at
www.ghba.org
MCBDD BOARD OF DIRECTORS
President: Scott Stevens Vice President: Susan Severa Past President: Jerry Hayley
Directors:
Rose Casanova Tim Hardin Michael McNall Kevin Tokarski
Article by 2010 Montgomery County Builders & Developers Division President Scott Stevens of Stoecker Corporation.
MONTGOMERY CO. DIVISION NEWS
Valuation Agitation
Low appraisals add another hurdle to an already challenging housing market
L
ast month I wrote about the current credit crunch affecting the real estate
industry, both locally and nationally. It’s a problem that’s likely to hang around for at least another year before we see a loosening from the federal regulators on how lenders make future real estate loans. And as much as I would like to blame the banks for getting us into this mess as well as being the holdup on getting us out of it, they probably aren’t the sole culprits.
For builders that are trying to get things going here in the Houston area, one of the many hurdles they face are low appraisal values, making closings much more difficult in an already challenging market. As a result of these low valuations, builders have to get more up-front money from buyers, something most buyers today simply don’t have.
ANNUAL GOLD SPONSOR
Builders Post-Tension Inc
403 RICHEY RD. HOUSTON, TX 77090
ANNUAL SILVER SPONSOR
In talking with a few of my appraiser friends in the industry, one of the problems they face is a more stringent set of requirements by the banks. Some lenders are requiring that appraisers include a distressed sale or foreclosure as a “comparable” sale, while others are tightening the geographical radius and time frame from which to find acceptable comps, all of which result in lower values. And because of the significant drop in new home sales over the past couple of years, finding acceptable comps to support a new home sales price is extremely difficult.
36
So I guess we’re back to blaming the banks again, this time for our valuation woes. But you can’t really blame them, can you? After all, lax lending standards and loosey- goosey appraisals helped pave the way for the housing freight train to derail in the first place.
But the situation in which we find ourselves is a bit tedious. On the one hand, we need lenders to stick to the rules and take the conservative route during the mortgage approval process so that we don’t have to endure a possible encore performance of the 2008 credit meltdown.
On the other hand, if lending doesn’t loosen up pretty quickly, we may find ourselves in a housing vacuum. That is to say, we may end up with a pent up demand for housing with no mechanism to actually get the consumer into the house. It’s a vicious cycle. For example, strict rules on appraisal practices cause market values to be flat or even undervalued, causing fewer numbers of loans to be approved, which in turn causes the market to remain critically anemic for much longer than it should.
I’m not sure what the answer is. But as a lot developer, all I know is the sooner builders can buy our existing lots, build houses and get them sold, the sooner I’ll be able to get back to work and actually build a few new lots for a change. That is, if I remember how.
MAY 2010 | HOUSTON BUILDER | GREATER HOUSTON BUILDERS ASSOCIATION – BUILDING A BETTER FUTURE
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48