Here's the surest sign that housing, in recovery here for three years, is really starting to recover nationally: People everywhere are griping at appraisers.
Oklahoma City has been there, done that.
Don't get me wrong. Builders and Realtors and homebuyers aren't sending gifts and flowers and candygrams to property appraisers — but they aren't calling for their heads anymore, either. Times were touchier in 2009 and 2010 and well into 2011, as recovery here took hold. That means the rest of the country has only just begun to grumble.
Why takes some explaining.
The worst of the housing bust here was in 2009. Softest prices. Slow sales stabilized by federal housing tax credits. It was the post-bust bottom for construction.
Homebuilders have been climbing back ever since, but not without difficulty.
In every transaction, at the most crucial point, was an appraiser whose word, as usual, could make or break the deal, or at least cause it to be rewritten to the detriment of the buyer. Buyer makes offer; bank approves loan; appraiser appraises house, and lo and behold the appraisal comes in less than the loan amount, and the buyer either coughs up more dough or walks.
What was not usual was the frequency with which deals went down in flames, or the reasons for it: In May 2009, Fannie Mae and Freddie Mac, which had bought so many bad loans in the normal course of business during the bubble that it almost ruined them, adopted the Home Valuation Code of Conduct as a way to tamp down some of the excesses.
New requirements meant to keep appraisers independent, and to eliminate conflicts of interest, had lenders working with appraisers from third-party appraisal management companies who usually were quite literally in unfamiliar territory. They had no feel for the marketplace.
Further, appraisers were lumping everything into the comparables they used to appraise a given house: other similar houses, short sales and foreclosures.
The Code of Conduct was tweaked in September 2010 to get appraisers and lenders and underwriters to communicate with one another — something they were afraid to do under the original code. Appraisers, among other things, were told to adjust for short sales and foreclosures and to include new houses directly sold by builders when appraising a home.
Complaints about appraisals, and appraisers, faded, as home sales increased, builders built more and the market kept improving. By the last part of last year, seldom was heard a discouraging word — partly because builders and Realtors stepped up to make sure appraisers had all the data they need, and partly because appraisers listened.
For most of the rest of the country, the happy backdrop — increasing sales, renewed vigor in construction, housing improving in general — is still new. Appraisers will have to catch up. Realtors and builders will have to help them rather than just gripe.