Property Appraisers having a difficult time!

With the dizzying increase in Florida real estate prices, appraisers are having a hard time coming up with what a property is actually worth."Our job is exceedingly difficult, with value changing, it seems, almost weekly," said Mike Maxwell of Maxwell & Hendry Valuation Services in Fort Myers. "We're finishing assignments and the next thing you know you'll find a series of contracts come through that already proved you wrong" because they're at higher prices.The median price of a single-family home in Lee County was up 44 percent from $200,000 to $287,500 in the year ending in July, according to the Florida Association of Realtors.
Banks are getting wary of making loans in the frothy environment, said Brad Cozza, a real estate agent with Keller Williams World Class Realtors."My business consists of a lot of construction loans in Lehigh Acres, Cape Coral and North Port," he said. "Banks are getting a little bit skeptical about the market: 'Are these houses really going to sell? Are these fake comps (comparative recent sales that determine a property's likely value)? ' "
Some banks are only making loans for 80 percent of a home's likely value, instead of 90 percent, he said. "We just basically have to stay on top of it and find the banks that are funding the projects we're depending on."Laurie Yeager, Southwest Florida manager of Wells Fargo Home Mortgage, said that with the surge in construction, it's sometimes difficult to use conventional methods of determining value. "We're having to comp these things to other projects, other sales that have not closed yet, which is difficult for appraisers because typically you only go with closed sales."A lender has to exercise caution, she said, "and there's certain things we don't stretch. I think it's difficult for all parties concerned: for the banks, the appraisers and all of us."
Yeager hasn't started to tighten up on the amount Wells Fargo will lend on new construction, but "I'm not saying that at some point in time we won't tighten up on that."Jeff Tumbarello of Allied Mortgage & Trust in Fort Myers said he's been seeing some skepticism among lenders for certain properties, "particularly stuff that has transferred a lot. You've got somebody who sells for $100,000 and then it sells for $120,000 and then somebody is trying to buy it for $200,000," all in a short period of time.Banks prefer to have a more gradual increase of prices, he said. "They refer to it as 'seasoning of title.' "
Meanwhile, Maxwell said he's seen a softening of the market recently, with prices going up at a slower pace. That may ease some of the difficulties, he said.But he warned that under any circumstances, an appraisal isn't a prediction of the future, just an assessment of current value.
There's no way to scientifically predict future prices, Maxwell said. "We're not fortune tellers."