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First off, if I EVER blew off a line of discussion on my work with a comment like “As a respected appraiser I prefer to do my own research” I could fairly expect to lose a lot of credibility. That’s a pretty condescending response to someone who’s asking serious questions. That’s at least the second time this reporter has responded like this and I am not at all impressed with her ethical performance. As with us all, it doesn’t matter how great she was 2 years ago or 30 years ago – none of us are any better than our last piece of work. It is the people who cite their experience rather than address the substance of the question whose work is most suspect.

This is not to say that a journalist should allow themselves to be led around on a leash, but they should keep themselves open to leads on their story and be willing to use their own research to verify. When it comes to the important stuff, I never blindly accept what someone tells me about something I’m working on – that’s what verification is all about. But I also don’t just outright dismiss a piece of information because it’s not from one of my usual sources. There’s no such thing as too much information.

If a reporter is too burned out to look at both sides of their story then perhaps it’s time to move on to selling classified ads or something that doesn’t require objectivity.

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I agree they probably will do both. Of course, the RE bulls will claim some level of vindication by focusing on price rather than value, but a correction by any other name is still a correction.

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Is the plan to subdivide the parcel and bring all the utilities, road improvements, site engineering and such to result in individual parcels or is the plan to flip the whole thing to a developer?

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Sorry, but I didn’t get anything about them conspiring to set housing prices. The article that link pointed to was about fees for service and competition amongst brokers.

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Pretty soon you guys are going to have too many of these to keep track of them individually. Your next step will be to completely ignore the listings and concentrate on closed sales.

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Lots of the people who are attracted to the downtown like it BECAUSE of the lack of kids and soccer moms in assault vehicles. I dunno if there’s enough of them to buy all those units (I suspect not), but that is who the developers were aiming at. Any pitches they made to families were probably an afterthought.

Honestly, I think there are some projects that were developed because of the availability of construction financing more than in response to percieved demand.

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San Diego County is something like 67% government owned. That doesn’t make commercial land in Boulevard (45 miles outside of El Cajon) a great investment opportunity over the next 5 years. I can practically guarantee that El Cajon will not expand out to include Boulevard any time in the next couple decades and I’d be pretty surprised if Yuma exploded to become a 45-mile wide community.

Commercial development is not like residential development. If you build it they may not ever come. Commercial use parcels are limited to certain uses, most of which require an established residential or traffic base to economically justfy development. Without the economic base in place, the commercial use won’t be able to generate sufficient revenues to pay the mortgage or rents, let alone the investor’s required returns. Boulevard will not be supporting a supermarket anchored retail center any time soon. It probably wouldn’t even suport another 7-11 right now, and its been a community for years.

The situation you’re describing might be a winner if the parcels they’re talking about cover all the major intersections and adjacent parcels at the highway access, ’cause then they might be able to justify a gas station and a Burger King (together) there. Every other parcel is going to be SOL until a community grows up there, though; and that might not ever happen in our lifetimes.

I’m not saying this is a stupid deal for an investor (’cause I don’t know), but I do think I’d want a whole lot more information than what these guys are dispensing before I invested. I also don’t think I’d be getting too excited about an argument that starts off with “they’re not making any more land”, because I happen to think AZ is one of the places that is manufacturing more dirt as time goes on.

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I have a feeling that most renters in this region would be happy to pull the trigger and buy a $210,000 home at 6.5% interest.

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If there’s an appraisal on the property you don’t necessarily have a right to read it, and even if you do you may not learn anything of substance from it. If the appraisal is extremely focused on valuing the site without going into the analysis of what would go on the site then all you’re going to get is a number.

If the financial planner doesn’t have the marketing materials necessary to sell to a savvy investor then it seems to me the only investors buying will be the non-savvy. That doesn’t sound too promising.

BTW, 300 manufacturing jobs should create some local service jobs too. 4,000 jobs is a pretty big stretch, though. However, even if the 4,000 figure was right, so what? To see what kinds of effects adding jobs in the desert has on local RE go on over to Calipatra where the prison was built. They added a ton of high-dollar jobs over there but it didn’t lead to price increases compared to other areas of the Imperial Valley. There’s just too much room for expansion to create the sense of scarcity needed to make one piece of scrub more valuable than another.

If you do get an appraisal and you want help deciphering any of it just let me know. I don’t know ‘nuttin about Yuma but I do know about appraisals.

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You should have bracketed the location by using RB/RPQ. I think you’d see it’s the location, not the schools.

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What’s funny is that as soon as you guys decide to jump back into the sales market, the rentals you leave behind will probably drop a bit in rental rates.

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I don’t know if the builders are really cooperating with each other but I guess I wouldn’t be surprised either way. This price range is the last bastion of optimism – it’s been propping up the averages whilst almost everything else has been sliding. Once it goes there won’t be any pretenses remaining.

There’s no reason not to wait right now. If interest rates dropped to zero tomorrow the market would still be flat because the investors mostly know better than to purchase in this market. Take 25% or more of the buyers out of the game and the inventory stacks up pretty fast.

I’ll betcha by 10/01/2006 those prices will have been cut by 10%. And it still won’t be enough to stem the tide.

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Even as we speak a lot of refinance applications are being denied for lack of equity. There’s a lot more scrutiny of loan applications right now, and that includes scrutiny of the appraisals in those application packages. Just in the last week I flagged several unreasonable appraisals in review, and in each case meaning that application was denied by my client (the bank). Now if those borrowers want to get a loan they have to try and hang their applications on a less vigilent lender. Some of them might succeed but others probably won’t. I can tell that for many of these borrowers everything is riding on getting the new loan.

As the rejection rate goes up, so does the level of scrutiny on the deals they do fund. The lenders might not want to tighten up but they have no choice as evidence mounts that the markets are in decline.

As I have been saying for the last few weeks, the passing of July 1 marks the end of using yr2005 sales as comparables in appraisals, so now appraisals are coming in lower than they would have even just a couple months ago. There’s no escaping this trend. The market psychology is shifting quickly. I seriously doubt that lowering the interest rate would stop it at this point.

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Sorry I couldn’t make it – I was teaching an appraisal class yesterday. Maybe next time.

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Ahh, the emotional appeal. That’s always a crowd pleaser here at Piggington’s. A buyer should be willing to pay more in order to not do a disservice to the seller or selling process (read: agent’s commission). Classic.

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