‘Repartments’ Trend Hits Sacramento Area
The Sacramento Bee reports the conversion bust has arrived in California. “A national housing trend called ‘repartments’ has hit the Sacramento area, leaving people like Violet Vernon wondering if she’ll ever be able to sell her home. The 1,100-square-foot Folsom condominium she bought in January for $318,000 is surrounded by what the Wall Street Journal dubbed repartments.”
“The owner of the 324-unit Waterford Place, on Natoma Station Drive, sold about 40 units as condominiums and then reverted the rest back to rentals. ‘The prices in Folsom were out of my range and this represented an opportunity for me to gain home ownership,’ Vernon said. ‘My concern now is that I may not be able to sell or refinance. I don’t know that I can find a buyer.’”
“Waterford Place is one of the first complexes in the Sacramento region to repartment, but the practice is more common in Florida, Las Vegas and Southern California, real estate experts say.”
“‘The occurrence of what could be called broken condo deals began in some of the markets that saw a boatload of new condo conversions,’ said Marc Ross, an associate at CB Ellis. ‘We’ve seen condo conversions that have reverted back to becoming apartments throughout the United States.’”
“Three years ago, new condominiums and apartments converted to condos were a bare 2.2 percent of new-housing sales in the six-county Sacramento region, El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties. In 2005, they reached 18 percent. Last year, the city of Folsom approved the conversion of 488 units to condominiums and had received proposals for the conversion of 944 more.”
“Waterford Place was the first, with units going on sale July 16, 2005. When sales slowed to a trickle, the sales office closed in May. Waterford Place executives said they understand residents’ concerns and never intended to have rental units in the complex, but that the slowing condominium market prevented them from following through on sales.”
“The Waterford Place condominiums vary in size, and prices started in the low $200,000s up to about $300,000. Rents range from $925 to $1,300 per month.”
“Jon Moss, senior vice president of Prometheus, said the complex ‘will be kept at a class-A level.’ Moss said his company is researching what problems, if any, owners may have with refinancing or selling their units. Ross said the challenge is not finding a lender but that the value of the unit often decreases if it is surrounded by rental properties.”
“Vernon has contacted Prometheus numerous times to no avail. She said the owners should have foreseen a slowdown in condominium sales when they purchased the complex in 2005. ‘They can always get another investor. I can’t,’ Vernon said. ‘I don’t know if I can rebound from this.’”
‘prices started in the low $200,000s up to about $300,000. Rents range from $925 to $1,300 per month.’
That’s ironic. Of course you won’t find a buyer in an apartment complex, especially when it is cheaper to rent! Here is a related blurb from San Diego:
‘San Diego has been deluged in recent years with applications to convert hundreds of apartment buildings, many of them built in the 1960s and 1970s, to spiffed-up condominiums. Only Miami is believed to have a higher percentage of apartments converted, according to real estate experts. There are currently 225 projects with 7,470 units awaiting approval in San Diego.’
‘Condo conversion sales and applications to convert apartment buildings have dropped off significantly in recent months as the housing market has cooled.’
Sorry to post at the beginning of the thread but I thought you’d all enjoy this.There is a picture on this blog for the Sacramento condo projects of a billboard that reads. ” Where Donald would live.”
I feel like taging under it “If he were forced to live in Sacramento”
http://forum.skyscraperpage.com/showthread.php?t=101021&page=16
I almost died laughing looking at one of the posts
http://tinyurl.com/hsuf7
The towers comparison is hilarious.
‘Condo conversion sales and applications to convert apartment buildings have dropped off significantly in recent months as the housing market has cooled.’
Women have been acknowledged to be one of the driving forces in this last 4 year boom (snicker).
All the New-Age, liberated, divorcees have bought.
Meanwhile, the Gen-X, Y, and Z’ers are all living with their parents or apartments and refuse to get caught up inthe mania.
The suckers in the pond have been fished out.
You must not be in SoCal, those Gen-X,Y,Z’rs were big, buyers and promoters of the bubble here.
Violet, you are the *weakest* link.
Unfortunately there are thousands of families lined up behind her, they just don’t know it yet.
Hmmmm, I guess there is *risk* in the only-goes-up, buy-now-or-forever-be-priced-out, 1000-people-move-here-everyday, tax-haven-miracle, they-aren’t-making-any-more-land, look-at-your-monthly-payment-not-your-total-owed, condominium market.
Man, I hate how we make up new words for everthing. REPARTMENTS! For cryint out loud, sounds like the same guy who invented Preowned for used. Call it what it is….an apartment. Ohhhhhh, so sorry, I forgot apartment has a stigma attached. No greedy whiny flippers is the stigma.
Reminds me of “resizing” or “rightsizing” as euphemisms for “mass firings”!!
Maybe Leslie Appleton-Young found her new “Moniker”…remeber she couldn’t come up for a new word after “soft-landing”
Call it what it is
Some dumb ass got srewed !
This article from Harvard today really ticks me off:
http://tinyurl.com/nf8ul
I guess we are screwed.
This is a real estate magazine web page. Consider the source. Sunsetbeach posted on the Register.com page who actuallly supports such studies. The majority of companies were homebuilders.
Credit where credit is due.
Backstage was the person that pointed out the list.
thanks backstage!
Not really, posted before, but here’s who provides “guidance” fo the folks who did the study…
http://www.jchs.harvard.edu/people/pabmemberlist.html
They are dreaming. Just wait until this recession kicks in. You know, the one the inverted yield curve is telling us is on the way. Then let’s see all that debt and leverage shift into reverse.
All the positive spin in the world isn’t going to stop what is coming.
These are the same people that told us there was no bubble at all to begin with. Analysts are often wrong.
Every national builder and supplier is a member of the Harvard group. The reports they publish are just like Suzanne, Lereah, and Appleton-Young’s b.s. and disinformation. Don’t be worried. It’s just regressive price rises.
This is currently on the OCRegisters.com front page of breaking news. What a crack up!
Realtors say Fountain Valley sign restrictions hurt sales
City officials agree to work on solution that won’t junk up lawns.
By JENNIFER MUIR
The Orange County Register
FOUNTAIN VALLEY – City Council members already knew the answer to the question posed to a room packed full of Realtors on Tuesday night.
“How many of you want it to be easier to put up open house signs in the city?” Councilman Gus Ayer said at the end of the special City Council/Planning Commission meeting.
The crowd cheered. Some even hooted and hollered.
The meeting marked the culmination of several months of tension between real estate agents and City Hall over Fountain Valley’s law regulating signs. The agents have complained that the ordinance – which restricts open house signs on public property and limits Realtors to one open house sign at one neighborhood entrance – is making it too hard to sell homes.
Twelve Realtors and homeowners spoke at the meeting. Some warned the law could lead to decreasing home values and make it harder for residents to sell as demand declines and the number of houses on the market grows.
“It’s a different market, a time when we really need you to consider this,” Realtor Clinton Rosen said. “Please consider our request. Please help us.”
Council members and planning commissioners said they would try to strike a balance between Realtors’ interests and keeping signs from peppering public lawns, causing unsafe conditions and infringing on residents’ quality of life.
“Twelve Realtors and homeowners spoke at the meeting. Some warned the law could lead to decreasing home values ”
And thousands of for sale and open house signs won’t?
Funny thing is my husband and I drove around FV the other day doing errands and there were 100’s of open house signs. One realtor put up a poster large than a king size bed.
“…is making it too hard to sell homes.”
I think there’s a little more to the difficulty selling properties than sign restricitions on public property. Hooted and hollered? Yeah, sure…I’ll bet they were elated.
City Council meeting or Amway convention - hard to tell in the OC. Boy, I’m glad these morons are solving the problem of slowing sales. Get those signs out before the Spring buying season is over.
I hate all those signs ,they look like shit . Why does the real estate business have to be in our faces all the time . The high inventory with all the signs have taken over all the blocks .
What I love about the Harvard article is the link advertising mid-fico of 580, refi up to 1.5 million. Who the hell is loaning 1.5Mil to just anyone. When are these knuckleheads going to wake up? I couldn’t imagine ever taking that large of a loan. How do these pizza guys sleep with these loans? If we go by the old numbers of 3x annual salary, one would need to earn $500K for this loan, that’s gotta be .1% of the entire world’s earners. Not long before these chickens come home to roost and these loans become toast.
Makes ‘ya wonder who in their right mind would purchase Fannie’s MBS products? Reminds me of Wonder sliced bread: all hype, and absolutely no nutritional value.
It would be impossible for a 1.5 million sub-prime loan to end up in a Fannie (or Freddie) MBS.
“‘I don’t know if I can rebound from this.’”
Don’t do the crime if you can’t do the time.
“‘I don’t know if I can rebound from this.’”
Stupidity can really limit your opportunities.
Other popular terms being repackaged by the press….
Re-possesion= Un-requested realty trasfer
Fraud=Unsolicited personal funds re-assignment
High Gas Prices=Combustionable non-charitable contribution
60% increase in forclosures = normalizing while still historically low
David Lereah = Impartial Senior Vice President and Chief Economist of NAR
This has to be the one of the funniest &%^#%$@ comments that I have ever seen, read or heard.
Political correctness to an art form. Telling ‘Untruths’ is a nice one. George Orwell would laugh if he came back. The “democracy” is looking more and more like his novel 1984. The reign of the psychopath and the sociapath. All empires finish that way. What a great way to enter in the 21th century. Re-possession by who? By the devil banker or eventually the poor taxpayer?
$1300/month x 12 / $300K = 5.2% return, before condo fees, upkeep, taxes and insurance. That is quite an investment to be leveraged on.
I feel sorry for her. The complex says the units were for sale for low 200s to up to about 300K. Our victim paid 318K
I’d bet this is also the same person who feels victimized, but would fight load tightening restrictions at the same time!
The greatest fools have been identified.
Look in the mirror. It’s you and all the rest of the world. The real estate bubble is soo big that every fool will be in it. That’s what happens when you don’t watch these crooks and these mafiosis called bankers.
That’s what happens when you don’t watch these crooks and these mafiosis called bankers.
I’ve been calling them “rackeeters” in every post!!!!!!!!!!!
Them and their little coven of rubber-stamp Skippie appraisers.
The f*ckers are gonna take us all down in this fiasco.
They are predators. No, CANNIBALS!
We don’t know the situtation with Violet, she may have been an investor, in that case she is screwed and I am happy for it.
But, if she is just some poor sap, maybe even elderly woman who had the carpet pulled out from under her right after she bought that really sucks and she is in mucho trouble…
Why does it matter, in both cases she’s an investor. In one case the primary benefit of the investment is in the form of expense reduction rather than direct income. This concept that somehow primary home owners are somehow more moral or deserving of charity than investors is utterly baffling to me.
She bought an asset with an abnormally low risk premium, and now she’s going to get a graduate education on why evaluation of risk is something that you should either be able to do very well yourself or hire experts (especially in levered situations).
Don’t be too quick to judge. The sales agreement could state that the complex will go 100% condo by x date. Going to ‘repartments’ or anything less than 100% condo is a breach of contract and actionable. Yeah, she could have made a mistake, but there could also be some misleading promises too.
I wasn’t judging them unconverting, it was mostly paying $318k for an annual gross rent savings of 5% before ownership costs. At that price her net return is bound to be near zero, she was bound to loose money in time as risk is not a stable creature. The unconversion just sped up the process some. How many of the condo buyers were planning to rent their units in the first place? When is an apartment not an apartment? When each unit is individually rented.
If her contract contained language such as you described than the converters are dumber than rocks and her only worry will be getting her claim settled before they enter liquidation (because they won’t be around for very long with no contingency planning).
Where were the “commissioners”, the “referees” when all the fouls were being committed? As all the doping was so obvoisly corrupting the game?
Check this quick analysis:
Loan 318K, Adjustible @ 3.75% (charitable), 5% down (who knows), her monthly payment prior to reset… $1399.07, compared to what the place is now renting for @ $1300. Of course, her $100 buys her the benefit or paying association ($100-$200?).
oops.
And the joy of paying property taxes!
Slightly OT, but I noticed something a bit startling last night on tv. I saw a Coldwell Banker commercial that was soliciting business from potential sellers. “We know how to market your house, etc.”
Now in the past five years, I’ve seen A LOT of commercials for real estate agencies (I’m in LA), and they were all focused towards BUYERS. Advertising the joys of buying, you can do it, buy your dream house, we’ll make it happen, etc. I don’t recall ever seeing a commercial, until now, that was really out there to capture the attention of sellers.
So does this mean that the real estate industrial complex is shifting its marketing strategy to capture market share of sellers, and if so, does that mean their internal research shows that there will be more sellers than buyers over the long term?
Or am I just nuts?
I’ve seen it as backwards to what you’ve seen. There used to be flyers tucked in my door telling me how much homes in my neighborhood sold for, and how I should consider selling my (rented) home. Only recently has Suzanne been trying to get me to buy.
Yeah, I’m running out of the notepads with the glamor shot in the corner. I might have to buy some paper to write my grocery lists on if this keeps up.
“But, but, but I just had to buy. If I didn’t get this little gem for $318,000, I would have been priced-out forever. Suzanne f’ing researched this!!!”
I like the “f’ing” thrown in there…that was good.
I for one , do not like it when a condo project does something like this .The person bought and closed escrow on the premise that the whole project was going to be condo/owners . If only 40 units out of the 324 are owned by people and the rest of the total 324 units have turned back to apartments ,how do they figure the Homeowners fees? How do they conduct homeowner meeting with the owner of the greater share apartments always being able to out vote the 40 Condo owners ?
Violet was stupid , no question ,but it seems like the situation would limit her ability to get a loan or re-sell . So for that reason I believe
the apartment owner of the greater shares should offer to buy back the owner condo units at the price any owner wanting out paid .
In my view ,condo developer made to big of a change in the project from the original intent and advertising .
I know it’s a buyer beware market ,but this is a little much to me .
I imagine Violet can pray for lightning, or an accelerant, or maybe a grease fire from leaving something cooking on the stove when she’s gone out for a long walk.
“I imagine Violet can pray for lightning, or an accelerant, or maybe a grease fire from leaving something cooking on the stove when she’s gone out for a long walk. ”
You know, you may be on to something Karl. I remeber last downturn there was alot of accidents that allowed debts to cash out..Insurance-wise
There was a recent link here concerning both a rash of house fires recently as well as SUVs being torched for the insurance money. Crime always seems to beget more crime. I imagine when you submit a no-doc liar loan for a new McMansion, wait six months and HELOC out some of that sweet equity for a SUV and then all of a sudden the impending economic crash starts cramping your style, it’s not much of a leap to start torching everything.
It sure seems like we’ve become a fraud driven society, although I imagine from the beginning of time folks have been thinking of ways to separate fools and the prevailing currency of the day.
As Turk the old Florida mason would say: “If you’re gonna be stupid you better be tough.”
I think it was if you gonna be dumb, you gotta be tough.
I remember that clearly from a Jackass episode.
Never buy into a new condo building. It’s like buying a new car. You pay a premium for the new part (never been lived in) and there is instant depreciation. As soon as a new condo bldg. opens up, hundreds of people move in, nicks the paint, stains the carpets, the tile floors lose their luster. Plus, buying a condo is really like buying into a business. With a new condo bldg. you don’t know how well it will be managed, the costs of maintenace are as yet unknown, and there are probably kinks to be worked out and once the developers are gone, good luck. Plus you don’t know how many of your “neighbors” are flippers, witness the condo building in N. VA that had dozens of lock boxes on the bench in front.
Copy and saved. Thanks!
Responding to the comment on the Harvard information. If there;s one thing I know about the Harvard types and the so-called financial writers, is, that they live in a different world than your average citizen. They are rooted in the belief of taking from the sheeple and benefitiing themselves. Any article that states that the present housing situation is going to improve is written to squeeze the last dollars out of the little people. Real estate investment seminars and their gurus don’t make money off of real estate, they make money off the fools who attend their seminars and buy their get rich scheme programs.
It proves that the average citizen is a moron and a dumb jerk.
And you still believe in democracy and free markets ? The only thing that thes Harvard guys have are good connections, and a good network. Look you don’t even have to be intelligent.
Go ask that to George W. , a big fat failure, a drunk, a coke addict, a real mediocre businessman. But daddy had a good network of buddies and friends. And the dumb jerk and moron average citizen voted for him. Real Estate bubbles and voting for a dumd jerk politician goes hand in hand.
I believe in free markets, but not democracy. Did I buy a house / condo the last four years? No. It’s all about choice and that’s how it should be. The buyers had history of R.E. bubbles, the last of which was peaked in 1989 and 1990 - which caught me. I would never have put more than 2 and a half times my income into a R.E. loan and that’s if I could see I had a secure job. I did at that time. And my loan was a fixed 30 year loan. But most people in 2004 and 2005 took out interest only loans and ARMs.
Buyer beware. I love free enterprise and I thrive in it. BTW, I’m a renter, and have been so since my R.E. loss in 1996. My net worth is about 13 times higher now than in 1996.
I don’t disagree with your statement in theory, but it’s hard to think of a non-democracy where markets have stayed truly free for any extended period. A lot of examples trotted out from economic history stem from inability to project power, rather than any commitment to free markets.
“Go ask that to George W. , a big fat failure, a drunk, a coke addict, a real mediocre businessman.”
Just a heads up, but there are a few wingnut republicans that hang out here and have drank gallons of the kool aid. Those of us in the reality based community know what a disaster these past 5 years have been.
Hope Harvard has a lot of Endowments in building stocks?
Morgan Stanley turns cautious on homebuilders
NEW YORK (MarketWatch) — Morgan Stanley downgraded the homebuilding sector to cautious from attractive, as order declines and increasing inventories are expected to lead to further negative earnings revisions. Analyst Robert Stevenson also downgraded KB Home (KBH : kb home com
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PHM27.17, +0.61, +2.3%) to equal weight from overweight. Stevenson said he expects the group as a whole to trade down another 15% to 25%. “Our view is based on the current supply/demand imbalance, the increasing odds of further [Federal Reserve] rate increases, and the prospect that operating fundamentals could continue to get worse,” Stevenson said. The Philadelphia Housing Index (HGX : phlx hsg sector index
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HGX0.00, 0.00, 0.0%) closed Wednesday up $1.65 at $204.30, and has already lost 22% over the last 2 months. For KB Home, Stevenson cuts his stock price target to $32 from $80. The company is scheduled to report second-quarter results after Thursday’s closing bell. Stevenson cut Lennar’s price target to $31 from $66 and Pulte’s target to $22 from $43.
Renting goes upscale…from the OC Register…kind of interesting…hate to pay the rent on these puppies…
http://tinyurl.com/frwad
This is freakin’ scary…and you can thank my company SCE for the jacked-up electricity prices….
SoCal housing CPI up 6.6% in May
If you didn’t know this, local inflation’s on the rise — and housing costs are one reason. Another depressing CPI report’s out today. Here’s the annual inflation rates for the OC/LA/Riverside region’s housing niches and sub-niches: 2004, 2005 and May’s performance.
SoCal slice 2004 2005 May ‘06
All items +3.3% +4.5% +5.4%
All housing +3.9% +5.9% +6.6%
Shelter +5.2% +6.0% +6.1%
• Rent of primary residence +6.4% +6.4% +5.9%
• Owners’ equivalent rent +4.8% +6.1% +5.2%
Fuels and utilities -1.2% +9.5% +16.4%
• Fuels -2.8% +11.4% +20.2%
• Gas (piped), electricity -3.1% +11.2% +10.8%
• Electricity -11.3% +6.8% +34.7%
• Utility gas service +11.3% +17.2% -3.1%
Furnishings/operations -1.3% +2.9% +3.1%
Yeah, I am hearing that the Investor Owned Utilities (PG&E, SCE, So Cal Gas, SDG&E) are getting tons of pressure from Sacramento to keep commercial and industrial rates steady and stick the rate increases on the residential side.
The latest rate case pretty much backs up that claim.
It seems that someone in Sacto knows how this cycle will end.
They are trying to preempt a flight of businesses from Ca to OR, NV, AZ and Mexico.
It won’t amount to much as the RE bubble pretty much assures how this cycle ends.
http://tinyurl.com/kq2ls
Link shows “suspicious fires” at Saint Louis construction projects. I wonder what this might really mean?
I didn’t know Tony Soprano had stuff goin’ on in St. Louie !!!
St. Louis has an Italian ghetto (The Hill neighborhood — home town of Yogi Berra and Joe Garagiola) and a rich mafia tradition:
http://www.americanmafia.com/Cities/St_Louis.html
“A national housing trend called ‘repartments’ has hit the Sacramento area, leaving people like Violet Vernon wondering if she’ll ever be able to sell her home.”
Trend my @ss. This is the face of the hard landing of the condo conversion craze.
I guess this means the anticipated rise in rents to push the rent/buy ratio upwards will be delayed. We’re not running out of land, apartments, or talking heads. There does seem to be a temprorary shortage of greater fools, however.
“There’s a sucker born every minute.” (Barnum and Bailey Circus)
K.C. Barnum is right.
How ironic that the developers name for this project would be Prometheus.
Does anybody remember reapartments during the late 80’s - early 90’s downturn? I don’t, and wondering if this is something new.
The 80s was as much commercial as residential (including condos). As such, there were many apartment complexes being built at the same time as the condo craze. This time around, the bubble has largely been residential, so much so that conversions became the rage. To this end, the mania of the 80s was largely big money — to the extent the small guy participated, it would be in shares of joint ventures. This current mania reaches so deep it’s hard not to find delivery boys and cab drivers with multiple condos.
Appreciate the perspective Suzanne
LA Times tells us it *is* a BUBBLE:
http://tinyurl.com/nacz2
“he air is finally coming out of San Diego County’s housing bubble.”
Just semantics, I know, but in the battle for mindshare, I think it’s significant.
this is just another reason to avoid condos, imo…esp. apt. conversions. Run, don’t walk from this RE
Ross said the challenge is not finding a lender but that the value of the unit often decreases if it is surrounded by rental properties.”
Check that DECLINING value box on an appraisal report, and that loan is DOA with Fannie and Freddie-ESPECIALLY NOW!
Better get out the Crisco and deep-fat fryer, Violet…
(Does anybody remember reapartments during the late 80’s - early 90’s downturn? I don’t, and wondering if this is something new. )
Yes, projects with unsold units did revert to rental buildings in NYC in the early 1990s, and people were screwed. I know someone who was the second, and last, to buy in building with 34 units and bad rent regulated neighbors. He eventually ended up selling back to the apartment owner for very little.
The bigger trend, however, was condos and coops that remained in individual ownership but were rented out. Many were purchased by late baby boomers hoping to cash in and move up to a house (as the 1960s generation had done). Instead, they ended up trapped underwater in a one-bedroom with two kids! So they rented out the units at a negative carry for YEARS until the units could be sold.
One ugly aspect: many of the 1980s coversions were co-ops, not condos. That means the co-op board has to approve the use of the apartment as a rental, and the tenant! You can imagine the battles on that one between board members desperate to preserve the perceived value of their owner-occupied buildings, and families desperate to get out.
A sad time. I’m convinced that the NYC economy recovered so slowly in the 1990s because of all the buying power that had disappeared due to high mortgage payments and the need to save up and bring money to closing for all those who bought at the peak.
Appreciate the info Larry.
“The bigger trend, however, was condos and coops that remained in individual ownership but were rented out.”
My first apt. in New York was a rented condo. I think by that time the rent was just enough to cover the landlord’s expenses, though not by much. Too bad for us she decided to sell and we lost our lease; it was actually a decent little apartment for a reasonable rent, a rare thing in NY. Too bad for her, she sold just before the bubble really started to accelerate here.
This happened in Florida as well. The Tampa area is full of apartments today that started out as condominums sold to suckers. When the market tanked, companies came in and bought all the units for pennies on the dollar and turned them into apartment complexes.
Many of them are very nice for rentals. We will see the same thing again in a couple years. Every second apartment complex has been converted to luxury condominums. This place is ripe for a bust.
A national housing trend called ‘repartments’ has hit the Sacramento area, leaving people like Violet Vernon wondering if she’ll ever be able to sell her home.
Of course she can find a buyer if the price is 50% off.
I would think a deeper discount than that. Seems to me that condos in the early 90s were about 1.5 times an average college graduate’s starting salary (salary = $25,000), or about a little less than 4 times the price of a sensible sedan (Honda Civic - 1993 about $10K). So that would make the condo then about $40k. Today, salary - $45k, condo should be about $67K. Maybe lower than than cosidering the glut of condos. Even so, this woman basically paid $316K for a $67k property. Where were the appraisers on this? Oh yeah, they were getting kickbacks. That’s a life ruining amount of debt. One way or another these people will get a hard lesson in saving money and a hard lesson in how much money $300K is and how long it takes to save that kind of cash… practically an entire lifetime.
Where were the appraisers on this? Oh yeah, they were getting kickbacks.
Appraisers don’t have the muscle to demand kickbacks.
In order to keep from starving to death because of the glut of appraisers caused by federal licensing, most will simply settle for the scraps sent to them by some sleazebag appraisal management company.
Appraisers might not get kick backs but they get hired to do more appraisals at about $500 per deal when the mortgage broker is happy. An appraisal probably takes about 4 hours to do including site visit. I would think that is incentive enough.
Condos for 67K? Where? Not in Sac, I can tell you that much. Even at the height of the last slowdown (’95) a family member puchased a Sac condo at 108K, a bargain by today’s standards. But I agree that 318K for a condo in Natomas (yikes!) is waaaaaay too much. Even in the newer parts of Natomas, crime is already seriously increasing.
Appraisers might not get kick backs. However, they do get repeat business from mortgae people they keep happy. An appraisal takes about 4 hours including site visit for about $500 in compensation. I think that is incentive enough.