Wednesday, November 7, 2012

Appraising in Hardin Co, Update


Wasn’t it the beginning of 2012 not long ago?  I’m sure you agree with me that time has flown by this year.  As I look back on this year, I would like to share a few tidbits concerning the property values in Hardin County.

First, many local lenders had predicted that 2012 would be very similar to 2011.  Most industry leaders in the area did not predict a big increase in appreciation across the county, and the sales data that we have seen so far has backed up this prediction.  As of October, we are within $2,000 of the median sale price for all of 2011, which was $147,000.  Keep in mind this is county-wide values, not individual neighborhoods, which brings me to my next point.

We are about two years out from the BRAC surge from 2010.  The families that relocated to our area and bought homes have been trying to take advantage of historically low interest rates by refinancing their mortgages.  One problem that has been coming up on most of these properties is that they were bought at the high point of the local market.  This makes depreciation a real issue even in our stable county.  My advice to these folks would be to wait until the current median sale price of their subdivision or the county is at or above the 2010 level.   

Lastly, I would like to point out what has been going on in 2012.  I have a market monitor on this website that tracks the quarterly median sale price of both Elizabethtown and Radcliff.  The monitor has been in a down turn for the past quarter, so I verified this by pulling monthly data from HKAR MLS.  2011 was the same way, which seems to indicate that once summer is over, activity and values start to fall off.  Keep this in mind if you are looking to put your house on the market.

Well, I hope you have found this article informative.  2012 has seen similar property values to 2011, lower values when compared to 2010, and higher values from 2008 & 2009.  Hopefully 2013 will see an increase in values without a huge jump in inflation.  

Wednesday, September 12, 2012

Appraising in Atlanta?

One of the advantages of owning your own business is being able to travel for business and write off the trip.  This was the case over Labor Day.  We have a client in Atlanta, that we have not met face to face.  So we decided to make a working vacation out of it and head to the Atlanta Motor Speedway the same weekend.

I want to thank Paul Kelley, Stephen Dunseith, and Michael Cincotta for the warm reception, good food, and productive time together.  In preparation for this trip, Paul and I talked about me doing some training for the production staff when we came down, and Paul and I decided on the topic of "how to spot inflated reports".

Putting this training together had an unexpected benefit.  It gave me a different perspective into the world of lending that gave me an idea for writing a new program.  There will be more on that later.  All in all, we had a great time in Atlanta, and look forward to the next chance to visit our out-of-state clients.

Wednesday, August 22, 2012

Curves in Hardin County


1.

I was born in Eastern Pennsylvania, and I know all about curvy roads.  Here in Hardin County Kentucky, it is not as bad, but I am here to talk about appraising property instead of roads.  One of the methods we use to analyzing our data is examining the central tendency.

According to Merriam-Webster, central tendency is defined as, “the degree of clustering of the values of a statistical distribution that is usually measured by the arithmetic mean, mode, or median”.  We commonly refer to this as the bell curve.  The bell curve is where the greatest concentration of datum points are located within the range of your data.

There are several different ways to measure the central tendency: mean (average), median, and the mode.  The mean is what is referred to as the average; all the data points are added together and then divided by the number of points.  The median is calculated by organizing your data in numerical order and then finding the center of the data.  The mode is the most reoccurring number found in a data set.  Let’s look at some examples. 
5
8
8
9
3
In the above data set, we have five different datum points.  The mean would be the sum of all five divided by five, or 6.6.  In order to find the median, you would need to reorganize the data so it is either ascending or descending.  Once that is done, the central point in a series of five is the third point, so the median would be 8.  The mode is easy to find since it is the most reoccurring number in the data set.  In this case it would be 8.  Now, let’s analyze the results.

We have a mean of 6.6, a median of 8, and a mode of 8.  The mean is more susceptible to data anomalies called outliers.  In our example, 3 would be an outlier because it is further away from the center of the data.  Can you see how outliers affect the mean?  Outliers need to be accounted for or else they can skew our data.  This is all great, but how does this apply to appraising property?

The central tendency can be used as your starting point, and it can be used to define your upper and lower limits.  If you have an above average home in a subdivision, then you can start at your median sale price and work your way up to the top end of your data range.  Central tendency can also be used to identify the predominate value in a particular area by using the mode. 

Well, that is central tendency in a nutshell.  Keep in mind that this primarily identifies where most of the data points are located in a data set.  Central tendency is also affected by outliers, and the bell curve may not always be equal on both sides of the median. What have you noticed about analyzing central tendencies?  Tell us your stories on our Facebook page, and don’t forget to click the like button before you leave. 

1. mainland.cctt.org

Sunday, July 29, 2012

Appraising High End Homes in Hardin County


Almost everyone enjoys looking at high end properties.  It’s fun to see what could be if money were not an issue.  I enjoy looking at the way high end homes are constructed because builders can do some pretty unique things when they are dealing with a large budget.  So you would think that when I get an appraisal assignment for high end property in Hardin County I would be looking forward to it. Well, not really.

Over the past several years everyone has heard about the recession.  Hardin County has seen the effects also, but not as much as some parts of the country.  One of the unfortunate casualties of the recession is the high end home market.  Let’s face it, when times are tough less money is spent on luxury items such as trophy homes.  Let me define high end for the sake of this article, and don’t scoff if your definition of high end differs from mine, it’s for the sake of the data. We’ll be looking at 3000+ Sqft homes over $500,000 from the HKAR MLS. 

Since 2005, the high end market in Hardin Co. has seen depreciation of 2.2% each year, with a median sale price of $651,274.  There were no million dollar sales, and the bulk of these properties were located around the Elizabethtown area.  So each time I see a million dollar property listed I say to myself: really? 

I mentioned earlier that I usually don’t look forward to high end appraisals in Hardin County.  The reason why is because most of the time I can see red flags as soon as I see any sale history in the past 7 years.  The recent sale means that it is probably not worth now what it was when it last sold based off the depreciation we’ve seen in recent years.  The bad news is I can’t say if we will start to see appreciation in this market.  Let me explain.
In terms of Real Estate, 2010 was a huge year for Hardin County.  We saw a large influx of new families from BRAC, and the moderate housing market jumped significantly for the back half of 2010 and the beginning of 2011.  Even during this time of increase, the high end market decreased.  I believe it was due to the people in this buyer pool going to Jefferson County instead of Hardin County.  What will it take to see the high end market recover?  In my opinion, local attractions and high paying jobs are the answer.  People go to live in Louisville because of the shopping, dining, sports, and attractions.  What does Hardin County have?  There has been talk of the cities in Hardin County combining into a metropolis, which would rival Louisville and Lexington.  Could this be the answer?  Only time will tell.

All that aside, trophy homes are cool.  Every one I've been in has had something that made me say “wow”.  But Hardin County's high end market is not doing well.  We will have to wait and see if this becomes a thriving market in the near future. 

Bluegrass Valuation Services provides appraisal services for lenders, home owners, and Realtors.  Please visit our Facebook page and click the like button in addition to recommending our services to your family and friends.   

1. danielsteamhomes.com

Wednesday, June 20, 2012

Facebook Etiquette

1.

The more I delve into the different uses of Facebook, the more I say to myself, “why did they post that?” People who typically have clean walls will suddenly have scantily clad women on them, and about once a week I see this post, “my facebook has been hacked, don’t respond to anything from me.” I believe people not considering the consequences is at the heart of the matter.

I started searching the topic at the source: Facebook. But I quickly realized that while their list was all true, it was still lacking. A Google search of the topic will result in dozens of hits with rules, and most of them are different. I determined that the #1 rule in Facebook is: there are no rules.

So, this article is my own list of Do’s and Don’ts for using Facebook. Feel free to chime in if you think something is missing, but at the end of the day, this is just my opinion.

Do’s

  • Realize that everything you put on Facebook could potentially end up out in the public. 
  • Be courteous to those who post on your wall by leaving a response (if the post doesn’t warrant being removed).
  • Be genuine. It’s what triggers others to post on your wall. 
  • Post often. Experts say that posting anywhere between several times a day, to every few days will be based off your audience. 
  • Post relevant content. Try posting content that is educational, funny, or informative. 

Don’ts

  • Don’t post irrelevant content. No one cares the last time you went to the bathroom.
  • Don’t send chain posts. This is becoming more of a problem because I’ve seen this topic several times in the Do’s and Don’ts search. Personally, I delete or unsubscribe all chain posts.
  • Don’t mix a business page and your personal profile. If you have a business, let your fans know about it, but don’t beat a dead horse. Get yourself a business page and promote your business there.  
  • Don’t steal your employer’s time by Facebooking on the clock. Use your breaks for checking your posts. While I’m on the subject of employers, you really shouldn’t throw your boss under the bus on Facebook either, you could be looking for a new job. 
  • Don’t accept strange friend requests, or send requests to strangers. 
  • Don’t post and tag compromising pictures of other people. 

Well, that about does it for the Do’s and Don’ts. However, I do have a “tweener” to throw out. Be careful of clicking on strange links or advertisements. Do a little research first to try and limit the exposure to viruses and hackers. I hope you enjoyed this, happy Facebooking, and keep an eye out for the next post.


1. facebook‑logo1.jpg

Wednesday, June 6, 2012

Market Update for Hardin County



I get asked all the time how the market is doing in the Hardin County area.  So I decided to start running some stats on what is going on in our area.

The Hardin Co. Sales Data graph is a snapshot of what has been going on in the county as we have transitioned from winter to spring.  Values have remained stable and activity is starting to increase.

The Hardin Co. Market Condition graph is a 12 month snapshot of several components in the local Real Estate market.  All three are important particularly to anyone who is looking to list their home.  Large amounts of supply are usually followed by lower list to sale ratios; If you are planning on a scheduled move, then the days on market become a more central figure to your decision making process.

All figures are averages over their respected timeframes


Stay tuned for future updates, articles, and general information. Don't forget to check us out on Facebook, and please share our content with your family and friends.









Wednesday, May 23, 2012

Statically supported Appraisals in Hardin and Jefferson Counties


2.
The appraisal industry has had three main approaches to value for quite a while: cost, sales, and income approach.  However, I’m hearing more and more about statically supported appraisals that include correlation and regression analysis. 

A correlation (r) is a relationship between two variables, and it expressed numerically between -1 and +1.  A correlation can be extracted from a population or sample data set; it shows zero, negative, and positive relationships.  A regression analysis takes the correlation and predicts further results.  For example, Insurance companies have shown that a positive relationship exists between the age of drivers and the amount of accidents that they have; through regression, they are able to predict the amount of accidents someone could potentially have based off their age and adjust your insurance accordingly (Johnson,R & Kuby,P, 2010, p.60). 

This is all fine and dandy, but how does this apply to appraising real estate?  In today’s market of tighter lending practices and fluctuating markets, appraisals need to be more accurate than ever.  In the past, the final opinion of value may have been based off one or two approaches to value, but the value can be manipulated by the comparable sales that are chosen.  A regression analysis can add statically supported data to the approaches to value, thus giving the final opinion of value greater weight and lowering the potential risk for investors. 
I’m not going to get into the nuts and bolts of regression, but I will say this: the accuracy of the data is based off the size of your sample or population.  In other words, select your sample without bias or subjectivity and get a large sample if at all possible. 

A regression analysis is not intended to replace an appraiser's ability to use his or hers training to determine the value of a piece of property, just to support their conclusion.  It is possible that we will be seeing a greater use of regression, with the expansion of on-line access to MLS and PVA data and increased demands from lenders.  I have been using regression to support my appraisals for over a year now, and I wish I could use it in all the areas that I cover.  Hopefully as more of our rural stats become available on-line, we will be able to expand our use of regression analysis into these areas.

Do you use regression in your appraisals?  What has been your experience with this approach to value?  Tell us your stories, and don’t forget to follow us on Facebook. 

1.    Johnson, R. & Kuby, P. (2010) Stat 2: Student Edition
    Brooks/Cole Cengage Learning, Boston, MA
2.    alsosprachanalyst.com

Monday, May 7, 2012

Appraising in Hardin County

It's always nice when you can appraise property that is less than 5 minutes from home.  Today I was on Deepwood Dr in Radcliff, and when I pulled the MC Report I wasn't surprised when I saw the results.  The number of sales and the values have been pretty stable for the past year, but new listings have gone through the roof.  There is now over 18 months of inventory in a 1 mile area of where I was at today.  Ending on a high note, bank repos and forclosures were under 15%, which is lower than what I have seen in the past couple years.

Thanks for reading, and feel free to check us out on Facebook.  There are constant updates and plenty of good content.

Tuesday, May 1, 2012

Appraising in Hardin Co.

BVS offers many valuation services for the following counties: Hardin, Meade, Jefferson, Bullitt, Breckinridge, and Grayson.  We work with lenders on conventional, FHA, and Rural Housing appraisals.  We also work with Realtors and homeowners in finding the right fit for their listing/appraisal needs.  We also provide statically supported appraisals through our Collateral Valuation Report.  Check out our services, blogs, and our Facebook page.

Tuesday, April 17, 2012

Appraising in Hardin County

Wow, I just finished doing some digging on the immediate area around Pine Valley Golf Course in Etown, and I was surprised at the amount of inventory. I know the numbers are a little hard to read, but there is over 55 months of inventory on the market.  This is partly due to the lack of sales activity coupled with a large increase in listings.  Search results are based off all closed sales and active listings within the past year that are within 1 mile search radius of the 2500 block of Chatsworth Dr according to HKAR MLS.

Sunday, April 15, 2012

Appraising and jobs

I always like to hear stories about  jobs being added to the economy even if they don't say what types of jobs they are.  In the past month, I have noticed an increase in real estate purchases on the appraising side of the house.  Click on the following link to get the rest of the story, and see how well Kentucky is doing in the jobs market.  


clotureclub.com



Saturday, April 7, 2012

Central Section Ranger Derby

Reaching out and having fun, it's something each of us should partake of.  This year, BVS had the opportunity to co-sponsor the Central Section Ranger Derby for the Royal Rangers.  Royal Rangers is a mentoring ministry for young men to be developed into Christlike servant-leaders.  This was there first race, but it was planned and executed very well.  We had good food, entertainment, awesome video/audio, lots of trophies, and most importantly, very close racing.  The track record at one point was decided by less than 2 one-thousands of a second, but ultimately was reset at a whopping 202MPH.

With the help of BVS, the Central Section was able to purchase a 32' aluminum track from Micro Wizard.  This track was problem free and very fast.  There were cars that ran 11MPH faster on the aluminum track when compared to the racing at last month's Derby in Louisville.  The Central Section will be hosting another Ranger Derby later this November at Heartland Christian Center in Vine Grove, Kentucky, and they hope to expand on their success by increasing the number of participants by at least two fold.   See ya at the races!









Wednesday, April 4, 2012

Market Update

1.
I want to thank Josh Hay for sending me these updates, and I also want to wish him well on his new position at Wells Fargo.  
I have been hearing from several sources such as Trulia.com, LinkedIn, and Bank of America that they are predicting the start of the housing recovery this year.  Some of these sources may want to be considered with a grain of salt, but local stats are looking promising.  Last year's 1st quarter in Hardin Co. saw 197 sales with a median sale price of $140,500.  This year's 1st quarter has produced 192 sales, and their median sale price is $142,250.  Although gas prices, inflation, and interest rates may start to climb, these are all indicators of a recovering market.  

MARKET COMMENT
Mortgage bond prices finished the week higher helping mortgage interest rates improve. Rates were negative Monday morning but got a boost later that day as Italian Prime Minister Monti suggested that Spain may soon become the epicenter of the European debt crisis. This reignited the flight to quality buying of US debt as fears grow that Italy and Spain will need a bailout like Greece. Unfortunately for Europe, the economies of Italy and Spain are considerably larger than Greece. Rates were helped later in the week when the durable goods orders data came in weaker than expected and weekly jobless claims were higher than expected. Mortgage interest rates finished the week better by about 1/4 to 3/8 of a discount point.
LOOKING AHEAD
Economic
Indicator
Release
Date and Time
Consensus
Estimate
Analysis
ISM IndexMonday,
April 2,
10:00 am, et
52.8Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates.
Construction SpendingMonday,
April 2,
10:00 am, et
Up 0.2%Low importance. An indication of economic strength. Significant weakness may lead to lower rates.
Factory OrdersTuesday,
April 3,
10:00 am, et
Up 0.1%Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
Fed MinutesTuesday,
April 3,
2:00 pm, et
NoneImportant. Details of the last Fed meeting will be thoroughly analyzed.
ADP EmploymentWednesday,
April 4,
8:30 am, et
225kImportant. An indication of employment. Weakness may bring lower rates.
Weekly Jobless ClaimsThursday,
April 5,
8:30 am, et
355kImportant. An indication of employment. Higher claims may result in lower rates.
EmploymentFriday,
April 6,
8:30 am, et
8.4%,
Payrolls +210k
Very important. An increase in unemployment or weakness in payrolls may bring lower rates.
Consumer CreditFriday,
April 6,
3:00 pm, et
$12bLow importance. A significantly large increase may lead to lower mortgage interest rates.
ADP EMPLOYMENT
The ADP employment report is a measure of employment derived from data of roughly 500,000 US businesses. The survey focuses on the private sector of the economy. In contrast, the Bureau of Labor Statistics releases the regular employment report which includes both private and government employment statistics.
The ADP employment report has gained more prominence lately in that it is delivered prior to the Friday employment report. This gives analysts an improved forecast heading into the payrolls component of the employment report later in the week.
The Fed is usually focused on keeping inflation in check. Tightening employment conditions can result in wage inflation. The ADP report provides solid data on these conditions. Despite this, the data still can diverge from the regular employment report. The employment report is derived from a household survey and an establishment survey. These surveys often differ from one another and from the ADP employment report in that they are based on different data sets. There are no guarantees that the most important employment report the first Friday of each month will mirror the ADP report released 2 days prior. With this in mind floating into the data is always very risky. Now is a great time to take advantage of mortgage interest rates at these historically favorable levels to avoid future market volatility.
RATE LINK is provided by Market Information for Mortgage Professionals. Copyright 2012. All Rights Reserved. Mortgage Market Information Services, Inc. The information contained herein is believed to be accurate, however no representation or warranties are written or implied.
CONFIDENTIALITY NOTICE: This e-mail transmission and any attachments may contain confidential or legally privileged information. This information is intended only for the necessary business use of the individual(s) or entity to whom it is intended even if addressed incorrectly. If you have received this e-mail in error, please immediately notify the sender by e-mail at the address shown. You should delete this entire transmission from your files if you are not the intended recipient and you are prohibited from retaining, distributing, disclosing or using any information contained herein. Thank you for your compliance.

1. blog.movers.com

Monday, April 2, 2012

Edge Ranking

I've been taking an online course over the past several weeks concerning Facebook marketing.  One of the more interesting areas is something called EdgeRanking.  Have you ever wondered why pages you like don't show up in your news feed?  EdgeRanking is process that Facebook takes in prioritizing the posts in your news feed.  Who better to explain this than Facebook guru, Mari Smith.  Click on the following link to enjoy this awesome article, and I hope you have an good week.


http://www.marismith.com/tool-measures-your-facebook-edgerank-score/

Monday, March 26, 2012

Market Update


I want to thank Josh Hay at US Bank for sending this update.


  MARKET COMMENT
Mortgage bond prices finished the week higher helping mortgage interest rates improve. Rates were positive Monday morning but quickly whipsawed higher Monday afternoon and Tuesday morning. Trading swung back positive again Wednesday and Thursday following weaker than expected existing home sales data and reports that Chinese manufacturing weakened.
Oil prices bounced around initially falling on consumption worries tied to the Chinese weakness, which eased some of the recent inflation fears. Prices spiked a bit higher Friday afternoon following reports that Iranian oil exports fell. Mortgage interest rates finished the week better by about 1/4 to 3/8 of a discount point despite the tremendous volatility.
LOOKING AHEAD
Economic
Indicator
Release
Date and Time
Consensus
Estimate
Analysis
Consumer ConfidenceTuesday,
March 27,
10:00 am, et
70.5Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.
Treasury Auctions BeginTuesday,
March 27,
1:15 pm, et
NoneImportant. 2Y Notes on Tuesday, 5Y Notes on Wednesday, and 7Y Notes on Thursday.
Durable Goods OrdersWednesday,
March 28,
8:30 am, et
Up 2.2%Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates.
Weekly Jobless ClaimsThursday,
March 29,
8:30 am, et
352kImportant. An indication of employment. Higher claims may result in lower rates.
Q4 GDP Third EstimateThursday,
March 29,
8:30 am, et
Up 3%Important. The aggregate measure of US economic production. Weakness may lead to lower rates.
Personal Income and OutlaysFriday,
March 30,
8:30 am, et
Up 0.3,
Up 0.4%
Important. A measure of consumers' ability to spend. Weakness may lead to lower mortgage rates.
PCE Core InflationFriday,
March 30,
8:30 am, et
Up 0.1%Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve.
U of Michigan Consumer SentimentFriday,
March 30,
10:00 am, et
74Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.
INCOME & OUTLAYS
The personal income and outlays release is a monthly report issued by the Bureau of Economic Analysis (BEA). The data is important because it is thought to provide a solid indication of future consumer demand. The personal income component is primarily a measure of wages and salaries. The outlays component is primarily a measure of spending on goods and services. Together the figures provide analysts valuable insight into consumer economic standing and consumption.
The prior release showed an income increase but not as much as analysts expected. Generally stagnant wages coupled with tighter borrowing restrictions make it difficult for consumers to spend money. It is important to note that no single economic indicator can consistently predict the future of the economy. However, the personal income and outlays report is a closely watched release. The consumer remains a vital component of the US economy.
The data this week has the potential to cause mortgage interest rate volatility. Now is a great time to take advantage of low rates.
RATE LINK is provided by Market Information for Mortgage Professionals. Copyright 2012. All Rights Reserved. Mortgage Market Information Services, Inc. The information contained herein is believed to be accurate, however no representation or warranties are written or implied.
1. deploy511.org