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August 2007 |
A Publication of ELLIOTT®
& Company Appraisers |
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PER-ROOM
HOTEL VALUES CONTINUE TO INCREASE DRAMATICALLY |
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 Hotel
Valuation Services (HVS) reported a 22% increase in the per-room value
of hotels in the United States for 2006. That, according to HVS, marks
the third consecutive year that per-room values of hotels have increased
by 20% or more. The annual report, called the Hotel Valuation Index (HVI)
said the per-room values averaged an increase of $18,000 last year.
The HVI, authored by Steve Rushmore, MAI and president of HVS, Sumit
Kapur and Michael Pajak, read in part, "Even more telling is that the
decline of capitalization and interest rates in the United States
indicates continued favorable financing conditions for investors to
refinance or buy lodging facilities for the next two years."
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BILL SEEKS TO HIKE
FEDERAL ROLE IN APPRAISAL LICENSING |
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 U.S.
Rep. Spencer Bachus introduced a bill in the House of Representatives
that would authorize the Federal Appraisal Subcommittee to regulate
state appraisal licensing agencies. H.R. 3012, known as the Fair
Mortgages Practices Act, would also require states to recognize
appraisal licensing from other states and to use specific qualification
standards in licensing appraisers
The Alabama Republican’s bill would strengthen restrictions on improper
appraisal influence and require a physical inspection by an appraiser on
appraisals for subprime loans.
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FANNIE MAE DIRECTS
APPRAISERS
TO RECOGNIZE DECLINING MARKETS |
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Last month Fannie Mae issued an
announcement, called Collateral Valuation Practices and Declining
Markets, in which it said appraisers are expected to "research,
analyze and report on the factors in the neighborhood that may
affect the market value or marketability of the properties in the
market area."
Currently, there is not a standard industry definition of a
"declining market," and it is up to the lender and appraiser to
ensure that the appraisal meets accurate market conditions.
"Because excessive sales conditions can artificially inflate the
sales price of a property, particular attention should be given
to unusual sales or financing concessions in the markets
experiencing: declining property values, an oversupply of
properties, or marketing times in excess of six months."
The appraiser, according to Fannie Mae, must provide
an objective assessment of market conditions in the neighborhood
where the appraisal is being conducted. Factor, such as price
changes, supply and demand and market activity, must be
considered in determining the appraised value.
"It is unacceptable for the appraiser to ignore these issues and
not report the factual property value trends and market
conditions," the announcement said. |
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FARMLAND CONTINUES
TO SKYROCKET IN VALUE |
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The U.S. Department of Agriculture
reported that farm estate values rose a whopping 40% from 2004
to 2006. Farmland’s worth, in this country, had more than
doubled from 1996 to 2006.
Researchers from the Agriculture Department credited this
increase to successful crops, investment for outsiders, low
interest rates, tax incentives and the fact that the housing
market has been strong. |
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NINE-FIGURE HOMES ON
THE MARKET -- MAY BREAK RECORD |
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As of this writing, no home in the
United States, according to our sources, has sold for a
nine-figure amount. That, however, very well could soon change.
The record currently is $94 million paid for an estate in Bel-Air,
CA, in 2001.
The record would be broken if one of several homes on the
country’s real estate market gets its asking price or a figure
anywhere near it. The highest asking price is $165 million. That
is the steep price tag of the Randolph Hearst estate in Beverly
Hills, CA. This 6.5-acre estate on Sunset Boulevard has a 1920s
mansion, called Beverly House, with 29 bedrooms, an upscale
movie theater, three swimming pools and a disco. There are also
six separate residences for security personnel.
Beverly House, by the way, is only one of six properties that
has come up for sale for over $100 million in the last two
years. The bottom line, however, is that, at this writing, none
of these nine-figure-priced residences have sold.
"It’s all fun and interesting, but the real excitement will be
the day when something sells for $100 million or more," said
Rick Goodman, publisher of Ultimate Homes magazine. "It’s only a
matter of time." |
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QUOTES OF WIT &
WISDOM |
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 "I
respect faith, but doubt is what gets you an education."
--
William Mizner
"Get you facts first, and then you can distort them as much
as you please." -- Mark Twain
"Every generation laughs at the old fashions, but follows
religiously the new." -- Henry David Thoreau
"Fear is the tax that conscience pays to guilt."
-- George
Sewell
"I’ve been on a diet for two weeks and all I’ve lost is two
weeks."
-- Totie Fields
"Politeness and consideration for others is like investing
pennies and getting dollars back."
-- Thomas Sowell
"Always listen to experts. They’ll tell you what can’t be
done and why. Then do it." -- Robert Heinlein
"Great works are performed not by strength, but
perseverance." -- Samuel Johnson
"The art of medicine consists of amusing the patient while
nature cures the disease." -- Voltaire
"Happiness is having a large, loving, caring, close-knit
family in another city." -- George Burns
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