To do an appraisal in an area and time when prices are falling is not difficult at all. I think it’s easier than appraising is a rapidly increasing market. You have to consider the prices of current active listings, and make sure you don’t value a property to their level, no matter what properties closed at 2, 4, or 6 months ago.
Whether prices go down 2%, 6%, or 10% in this area over the next year isn’t my concern – I’m just reporting what I find in the current market. It’s up to the lender how much they want to lend. If they think, say, that prices will go down 5% in an area over the next year, you wouldn’t think they would make 100% loans – but there are still a lot of 100% loans being done right now.
