Home sales numbers in St. Charles continue to increase, but there are a few glitches that occur. There are large numbers of homes at below-market prices & the Interest rates are hovering around 3.5% !! The home sale numbers have been increasing every month since June 2011.
One of the glitches that has been occurring stems from Low Valuation in Appraisals – here’s an excerpt of an article on this subject (click here for the full article).
The real estate market is recovering but still faces hurdles, notably from tight mortgage credit, but problems with a sizeable share of real estate appraisals also are holding back home sales, according to survey findings by the National Association of REALTORS®.
Most appraisers are competent and provide good valuations that are compliant with the Uniform Standards of Professional Appraisal Practice. However, appraisals generally lag market conditions and some changes to the appraisal process have been causing problems in recent years, including the use of out-of-area valuators without local expertise or full access to local data, inappropriate comparisons, and excessive lender demands. In addition, before the beginning of last year, some lenders’ loan processors edited valuations, cutting them by a certain percentage.
Although 65 percent of REALTORS® surveyed in September report no contract problems relating to home appraisals over the past three months, 11 percent say a contract was cancelled because an appraised value came in below the price negotiated between the buyer and seller, 9 percent report a contract was delayed, and 15 percent said a contract was renegotiated to a lower sales price as a result of a low valuation. These findings are notable given that homes in many areas are selling for less than replacement construction costs.
Lawrence Yun, NAR chief economist, says there has been a steady level of appraisal issues for quite some time. “Though the real estate recovery is taking place, the combined issues of stringent mortgage lending requirements and appraisal frictions are hampering otherwise qualified buyers from purchasing a home in a timely fashion, and in some cases are preventing them from buying at all,” he says.
If you are a first time home buyer thinking about buying a home in St. Charles or St. Louis Counties, working with a Real Estate expert than knows the St. Charles and St. Louis County market can really help you. Sandra Meranda specializes in the St. Charles and St. Louis county home markets. Contact me for help with finding or selling your home.