Posts About Appraisal and Appraisers written by the staff of The Robinson Real Estate Appraiser Group, Maryland.

Baltimore Trends and the Outlook for 2019

Buyers and sellers are in for another nail biting year of making predictions regarding the Baltimore metropolitan market. There seems to be a slightly harder road ahead than last year due to the future of the Federal Fund Rate. Interest rates are projected to rise from its current 5% to 5.5% by the end of 2019. The rate hike will be based on data from the overall economy growth. If the economy does not move forward with the growth as expected, the hikes will likely be delayed.

The Baltimore market is projected to have slightly more inventory with an overall 2% increase in housing prices in 2019.. so on the horizon there will be more inventory, higher prices and a raise in rates. This combination is making it more difficult for the first time home buyer to secure a home. Millennials make up the largest demographic of new home buyers which will be heading into a year where home-ownership looks to be a little tougher than the past few years.

There are other factors coming into play this next year on a national level that is new territory for all of us. The tax bill that was passed at the end of 2017 was in effect for the full year of 2018. This reform is new so the outcome is unknown of the positive or negative effects on the 2019 economy. The reform includes changes in standard deductions for married couples and for singles: you’ll need to take a close look at that this year to be sure you will still be itemizing because the standard deduction is much higher. There is also a limited tax advantage on mortgages: mortgage interest is still deductible, at least in principle (pun intended), for the vast majority of homeowners. However, whether they actually receive that deduction or not will depend on a multitude of other factors. This is yet another scenario in the economy that a simple answer does not apply.

On a more local level, the economy of the Baltimore Metropolitan area (in part) will soon feel the benefits of the recent decision of the new Amazon Headquarters in northern Virginia. The second Amazon headquarters is going to go by “HQ2.” The company says that this won’t be a satellite facility, but rather an equal to its current headquarters in Seattle, Wash. It also notes that it will be investing $5 billion into its creation. Located approximately 30 miles outside of Washington DC, Loudoun County is part of a burgeoning tech corridor. The employees would live in Loudoun County or commute from one of the surrounding counties, Maryland (directly to the north), or West Virginia (due west). So with the influx of jobs and the need for housing the opportunities for an economic boost for the Baltimore area looks to be quite positive.

The economy is multi-faceted, multi layered, temperamental and always changing; home prices follow this trend. Robinson Appraisal Group can offer you their services on determining the value of your home in an ever-changing climate. We offer home appraisal services in Baltimore County, Baltimore City, Harford County, Howard County, Carroll County, Anne Arundel County and Cecil County.

An Estate Sale and the Appraisal Process

After 25 years of appraising properties Baltimore Metropolitan area I have seen my fair share of estate sales. But what is an estate sale? An estate sale means a person has died and the party/parties that inherited the property are selling it.  Estate properties usually are priced well to reflect that fact that they need work. Another  possible issue is that if there are multiple parties involved, they may not always agree on what price or terms they’ll accept and there may be delays  due to the need to negotiate among each other, though hopefully that is not the case.

As an appraiser there are multiple ways to appraise a property that belongs to an estate. One method is the traditional appraisal process of determining the most recent and appropriate comparables in the market area surrounding the property.

Many times we are asked to evlauate the property’s value as of the date of death of the deceased owner(s). This is typically a private appraisal for an attorney or for one of the parties who will be part of the estate looking for the market value. When establishing the value on the date of death  the sales comparables must have occurred prior to the date of passing, so if I was doing an appraisal on a house where the  deceased passed 12 months ago, the sales would had to have sold prior to that date, say 13 or 14 months ago. You cannot use sales that occurred after the date of passing: this is called a retroactive appraisal.

The appraiser can not be biased or allow recent circumstances in the market to affect the value after the retroactive date…say the market plummets or prices have increased substantially due to high demand… the estate appraisal should reflect what the market was on the date of the passing, not anytime after.

A big part of maximizing what you leave behind is minimizing taxes. Federal taxes on gifts and estates can be among the highest assessed on any financial transaction. In addition, some states levy their own estate or inheritance taxes.

An appraiser,  an attorney and a tax advisor can aid in the process of estate issues. As an appraisal company we can provide one of the services needed in regards to your estate and real estate valuation.  Robinson Appraisal Group covers the areas of Baltimore County, Baltimore City, Harford County, Cecil County, Carroll County, Anne Arundel County and Howard County. Having a professional appraisal gives the parties involved a reputable report to work with in meeting IRS and state agency requirements. It would be our pleasure to work with you during this arduous process.

Interest rates are the highest in the past 7 years!!!

Interest rates for buyers with good credit or credit worthiness for a 30 year loan is approximately 4.875% while average buyers fall around 5%. A hike in rates have been talked about since last year with minimal increases until recently. Mortgage rates started around 4% at the beginning of 2018 and have seen a steady increase. With the positive retail sales data and the rising home costs due to low inventory in some of the major markets the interest rate hike is not a complete surprise.
Typically a rise in rates will slow down the rise of prices in this high demand/low inventory market but the demand of today’s buyer has not been derailed by the spike in interest rates thus far. We have had years of low interest rates, now with mortgage rates creeping up to 5% and gas prices rising a correction is looming for the typical buyer.
Borrowers that refinance their current loans make up a smaller portion of the mortgage business than at any time in the past two decades, which poses a challenge for lenders who already fear higher interest rates and climbing home prices could potentially stunt purchase activity.
In a January statement, Fed officials said they expected annual inflation to “move up this year and to stabilize” around the US central bank’s target inflation rate of 2%. The Fed has forecast three rate increases in 2018.
According to local real estate agents the Harford County real estate market is a bit more competitive than Baltimore and Cecil County markets. Properly priced properties typically sell within days of being listed many with multiple offers. This seller’s market may come to a screeching halt with interest rates beyond 5%, so if you are looking to buy or sell, keep an eye on trends and rates. An appraisal can help you make a decision to buy or sell in this ever changing market. Please contact Robinson Appraisal Group for any help you may need in your valuation process.