I appraised all through the 1990s and I saw it all. Early in the cycle I appraised half-completed spec homes where the contractors had pocketed the draws and split. I appraised apartment properties where 7 out of 8 comparable sales were being sold by a bank. I appraised commercial properties at $40/SqFt – inclusive of land and improvements. I appraised SFR lots for $25,000; and on occasion less than that. I appraised properties that the banks declined to foreclose on because they didn’t think they could discount them enough to unload them and they didn’t want to carry the asset for more than a year. I appraised a lot of properties for divorce attorneys because couples were splitting up over their RE losses.
By the time it was all over I just KNEW the carnage was so obvious that these people would learn a lesson they would never forget. How wrong was I about that?
Now it’s 2007 and I have already appraised a couple half completed spec homes (and appraising houses isn’t even my thing) and condo conversions; I’m already running into market segments where there are enough must-sell listings to influence the pricing. I’m already appraising properties where the borrower is attempting to work their way out. Even the commercial properties are peaking and starting to trend down. And yes, the commercial markets are just as gassed now as the residential markets were at their peak.
I’d claim deja vu but it’s happening so much more quickly that I think it really is going to be different this time. Different-bad, not different-good.
