The Appraisal Institute will unveil its redesigned Web site March 4. The redesigned Web site, www.appraisalinstitute.org features streamlined content and intuitive navigation for greater ease and efficiency, according Appraisal Institute Manager, Online Marketing, Yoon Hernandez. It now also offers even more useful resources and timely information to serve members and visitors as an all-in-one portal.

Links to the most frequently accessed areas of the Web site appear on the new home page’s left side, such as: “Find an Appraiser,” the Appraisal Institute’s online member directory, which appears at the top left corner; login fields for the new members-only area called “My Appraisal Institute” are directly below; and prominent “Go” buttons lead to the Lum Library and the Appraisal News Online sign-up page. In addition, links to the member benefits page and online membership application (the “Join” button) are prominently displayed so that prospective members can instantly learn more about membership opportunities.

Hernandez added that the recent launch of the Appraisal Institute’s redesigned Web site also marks the beginning of a new branding campaign for the entire organization. “Our marketing and communication initiatives, moving forward, will incorporate the color palette and imagery of the new site,” she said.

For more information on all of the new features, look for the First Quarter issue of Valuation magazine, to hit mailboxes in mid-March. Or simply visit www.appraisalinstitute.org after 1p.m. (CST) March 4 for a first-hand look.

Federal Deposit Insurance Corporation Chairman Sheila Bair said "weaknesses and holes in our bank regulatory structure lie at the heart of our current housing predicament" and that "the home mortgage market needs strong rules." The comments came at a February 22 address to the Joint Venture Silicon Valley Network State of the Valley Conference in San Jose, Calif.

Much of the U.S. mortgage meltdown developed outside the regulated banking sector by "lightly regulated" mortgage finance companies, Bair said. As these nonbank lenders increased their market share through aggressive use of easy credit, some of the larger banks and thrifts also began easing credit standards, "which widened the mess we are now in."

Bair called for rules that "restore common sense and basic notions of fair play ... rules that apply across the board so they protect all homeowners, regardless of who their lender is, or what state they live in."

First and foremost, she said, there must be an enforceable standard requiring lenders to determine if a borrower has the ability to repay. Lenders should qualify applicants for adjustable-rate mortgages to ensure they can repay the loan at the higher rate when the loan readjusts, as well as at the lower introductory rate.

It is also time, she said, "to end compensation schemes that give mortgage brokers every incentive to steer borrowers into the highest-rate product possible" as well as limiting or eliminating prepayment penalties, because they "are inherently anticompetitive and, in some cases, abusive."

Congress is expected to begin formal consideration of a plan to promote the production and use of renewable fuels, energy efficiency (in homes and commercial structures) and other steps to reduce greenhouse gas emissions.

The 10-year, $18 billion energy tax package would be paid for largely by repealing or reducing tax breaks for the oil and gas industries, although the latest language is reportedly scaled back from last year's version, which was ultimately blocked by Senate Republicans and the White House.

The new energy tax bill includes real estate-supported provisions that would extend the $1.80 per square foot energy-efficient commercial buildings deduction; extend the 30 percent business credit for solar and fuel cell investment; and create a new 10 percent investment tax credit for combined heat-and-power property.

The Office of Thrift Supervision is in the early stages of preparing a plan to help mortgage borrowers who owe more than their homes are worth and to discourage them from abandoning those properties, agency officials said.

Under the regulatory agency's proposal, these borrowers would refinance into government-insured loans that cover the current value of their homes. The refinancing would pay part of what is owed to the original lender. For the remainder, the lender would get what the plan's backers call a "negative equity certificate." The lender could redeem the certificate if the home is eventually sold at a higher price.

The proposal, which was briefly mentioned at a regular quarterly news briefing, is a sharp change from the way troubled mortgages are handled now. It is the latest government initiative aimed at containing the growing number of defaulting mortgages. More details should emerge over coming weeks, OTS spokesman Kevin Petrasic said. The plan has been extensively analyzed internally and is now being discussed with policymakers and industry officials, he said.

The plan still has many political and logistical hurdles. It has not been vetted by the White House, Congress or other policymakers. The Federal Housing Administration declined to comment on the specifics except to say it is "regularly looking at new ideas and actively exploring ways to expand the eligible pool of creditworthy borrowers FHA can serve."

As part of an investigation into alleged abuses of the state's conservation-easement program, the Colorado Division of Real Estate is looking into donations to the Greenlands Reserve land trust. Appraisal documents and sales and marketing materials that refer to use of an appraiser or appraisal company are among the items targeted by a recent subpoena. The trust was ordered to turn over documents involving at least 90 conservation easements.

Nearly all of the tax credits for landowners who donated an easement to Greenlands Reserve were the maximum allowed under the law, according to a Department of Revenue database. "That in itself is not a red flag," said Jill Ozarski of the Colorado Coalition of Land Trusts. "The red flag is the value of the easement."

The land trust's president, Howard Hallman, said it reviews the appraisals to make sure they are reasonable. "It's based on the value of gravel for gravel mining," he said. "We have a lot of easements in places next to existing gravel pits. These appraisals are based on people going out and drilling, the quality of that gravel and the royalties to the landowner if the landowner didn't give up those rights."

Greenlands Reserve is the second land trust that the Division of Real Estate has subpoenaed. Last year, it sought the records of Noah Land Conservation, now called Colorado Natural Land Trust.

Bank seizures of U.S. homes almost doubled in January as compared to a year ago, as property owners failed to make higher payments on adjustable-rate mortgages. Repossessions rose 90 percent to 45,327 from January 2007, according to RealtyTrac Inc. Total foreclosure filings, which include default and auction notices as well as bank seizures, increased 8 percent in January from December, and 57 percent from January 2007.

More than 233,000 properties were in some stage of default in January. Defaults among subprime borrowers and those unable to meet rising payments on adjustable-rate loans drove foreclosure filings to the highest since August 2007 and the second-highest since RealtyTrac started keeping records three years ago, the company said. About $460 billion of adjustable mortgages are scheduled to reset this year, according to New York-based analysts at Citigroup Inc.

Nevada, California and Florida recorded the highest foreclosure rates among the 50 states, according to RealtyTrac. Nevada had 6,087 properties in default or having been repossessed, 95 percent more than in January 2007 but 45 percent less than in December. California had the highest total number of defaults and foreclosures with 57,158 properties facing possible seizure in January. That was more than double the year-earlier figure and was up 7 percent from December. Florida had the second-highest number of homes in default or foreclosure with 30,178 in January, more than double the figure for the prior year but 3 percent less than in December. Arizona, Colorado, Massachusetts, Georgia, Connecticut, Ohio and Michigan rounded out the top 10 states worst off in terms of missed payments and property seizures, RealtyTrac said.

U.S. home prices fell in 2007 for the first time since the Great Depression, according to a release from the National Association of Realtors. That made it more difficult for homeowners to sell or refinance properties encumbered by mortgages higher than the value of the houses themselves. Additionally, sales of existing homes fell in January to the lowest in at least nine years, NAR said.

Since January 2007, the median price of an existing home fell 4.6 percent to $201,100. The median price for a single-family home dropped 5.1 percent to $198,700, and condominium and co-op prices fell 1 percent to $220,400.

Mortgage companies including Fannie Mae and HSBC Finance have joined a U.S. Treasury Department-led effort to offer 30-day foreclosure freezes to give delinquent borrowers more time to arrange payment plans. Citigroup Inc., JPMorgan Chase & Co., Bank of America Corp., Wells Fargo & Co., Washington Mutual Inc. and Countrywide Financial Corp. have initially agreed to participate in the effort.

In a February 26 release, the Office of Federal Housing Enterprise Oversight said that while pockets of strength remain, the coasts and the Midwest showed the biggest declines.

OFHEO’s research confirmed NAR’s findings. U.S. home prices fell in the fourth quarter of 2007 according to OFHEO’s seasonally adjusted purchase-only house price index.  The index, which is based on data from home sales, was 1.3 percent lower on a seasonally-adjusted basis in the fourth quarter than in the third quarter of 2007.  This decline was substantially greater than the 0.3 percent price decline between the second and third quarters. Over the past year, prices fell 0.3 percent, as the fourth quarter decline erased earlier price gains.

However, OFHEO’s all-transactions House Price Index, which includes data from home sales and appraisals for refinancings, showed less weakness than the purchase-only index. The all-transactions HPI rose 0.1 percent over the latest quarter and 0.8 percent over the latest year.

OFHEO Director James B. Lockhart said, “Although prices for home purchases in the [fourth] quarter fell in every state except Maine, only 16 states plus the District of Columbia showed price declines for the full year 2007.”

“The year 2007 showed the first four-quarter decline in the purchase-only index since its earliest data in 1991,” Lockhart added.  “However, both OFHEO’s purchase-only index and the all-transactions index show relatively greater house price stability than do other nationwide house price indexes.  That may reflect, in part, the greater stability in the prime, conforming mortgage market served by the Enterprises than in other segments of the mortgage market,” said Lockhart.

 “Given the recent turmoil in housing markets we thought it would be helpful to provide a greater amount of information about price trends,” Lockhart said.

“While the declines are significant and quite large in some areas, the market still needs to work through its overhang of unsold inventory,” said OFHEO Chief Economist Patrick Lawler.  “How much further down that inventory will ultimately push prices will depend on a number of factors, including what happens to interest rates and the overall health of the U.S. economy,” Lawler said.

OFHEO’s purchase-only and all-transactions house price indexes track average house price changes in repeat sales or refinancings of the same single-family properties. The purchase-only index is based on more than five million repeat sales transactions, while the all-transactions index includes more than 34 million repeat transactions. Both indexes are based on data obtained from Fannie Mae and Freddie Mac for mortgages originated over the past 32 years.

The full report is available at www.ofheo.gov/media/pdf/4q07hpi.pdf.

According to Hanley Wood Market Intelligence, recent housing data is encouraging, but it is still too soon to declare the bottom has been reached. Housing starts in January posted a slight 0.8 percent gain, rebounding from fresh lows in December; the National Association of Homebuilders housing market index showed builder sentiment edging upward for the second straight month; and lower mortgage rates coupled with favorable prices have started to spark interest in home-buying again.

Housing starts in January rebounded slightly off record lows in December.  Total U.S. housing starts increased 0.8 percent from December as strength in multifamily building activity helped to offset continued weakness in the single-family segment. Single-family starts fell 5.2 percent from December while multifamily starts jumped 17.6 percent.  Building permits, however, continued to fall as total issuances dropped 3.0 percent with single-family permits posting a 4.1 percent decline from the previous month.

National average mortgage rates jumped to 6.04 percent in Freddie Mac’s February 21 Primary Mortgage Market Survey, its highest level in 2008.

Following three months of increases in demand for design services, the Architecture Billings Index dropped in January, leading to speculation that there might be a sustained downturn in the nonresidential market. The American Institute of Architects reported the January ABI rating was 50.7, down sharply from the 55.0 mark in December, and inquiries for new projects was 59.5. Any score above 50 indicates an increase in billings and inquiries.

“Given the concerns about condition of the overall economy, coupled with a suffering housing market, it is not surprising to see a falloff in demand for architectural services,” said AIA Chief Economist Kermit Baker. “This is likely to affect firms that specialize in commercial and industrial projects the most because businesses are expressing growing anxiety over a potential recession and are cutting back on plans for expansion.”

Other than the Northeast, which registered a 63.0, the regional averages were fairly consistent, with the South at 53.9, the Midwest at 49.3, and the West at 51.3. The sector index breakdown was multifamily residential (55.4), commercial / industrial (54.5), mixed practice (51.3), and institutional (51.7).

The Architecture Billings Index is derived from a monthly “Work-on-the-Boards” survey and produced by the AIA Economics & Market Research Group. Based on a comparison of data compiled since the survey’s inception in 1995 with figures from the Department of Commerce on Construction Put in Place, the findings provide an approximately nine- to 12-month glimpse into the future of nonresidential construction activity. For more information, visit www.aia.org.

Fallout from the residential subprime mortgage market will continue to strongly affect the commercial real estate market according to 96 percent of institutional respondents to Real Estate Research Corporation’s independent investment survey. Several respondents noted slower lending and higher capitalization rates for commercial properties, as lending standards tightened. RERC’s winter 2008 issue of the RERC Real Estate Report was released in mid-February.

RERC President and CEO Kenneth P. Riggs, Jr., MAI, noted that although commercial real estate has not been hit with the same one-two punch that the residential market has received, he indicated that they “have been watching for some time how the global credit crisis has been affecting the debt markets, and have recognized that some of the financial arrangements – CDOs and other debt structures – are particularly at risk. Although privately held commercial real estate has not seen nearly the same degree of risk, there is a sense of unease (even among those associated with the equity side of this asset class) about what there is yet to learn if we dig a little deeper.”

This view seems to be borne out by the investment conditions ratings given by RERC survey respondents. Cash was rated higher than commercial real estate, stocks, or bonds as an investment alternative during fourth quarter 2007. In addition, almost all property sectors covered in the report received lower investment conditions ratings than in the previous quarter. The apartment sector is the only property type that received a higher rating than the previous quarter.

In addition, institutional survey respondents are anticipating lower rental growth with generally higher expense growth among most property types. Office rents are expected to decline 30 to 40 basis points, while expense growth is expected to increase 10 basis points. Industrial rents are expected to remain flat or to decline up to 20 basis points, although expense growth is expected to vary according to subsector from 10 basis points higher to 20 basis points lower. Retail rents are expected to be 10 to 30 basis points lower and expense growth 10 basis points higher. Survey respondents expect apartment rental growth to be 30 basis points lower, while expense growth for this sector is expected to remain flat. Hotels appear to be most affected overall – rental growth is predicted to decline 70 basis points and expense growth increase 20 basis points.

As average prices start to decline, required going-in and terminal capitalization rates are expected to increase 10 to 20 basis points for most institutional-level office, industrial, apartment and hotel properties, while rates are mixed for the retail subsectors.      

“As 2008 gets under way, we can expect capitalization rates to continue to increase. We may see capitalization rates increase more quickly on a regional level, as they seem to be doing in the Midwest and East regions, although the West and South regions are seeing a little less movement,” Riggs continued.      

For more information about RERC or the RERC Real Estate Report, contact Barb Bush at 319-352-1500 or bbush@rerc.com. Appraisal Institute members can get a free trail report, after which they can also subscribe at 20 percent off the open rates of $275/year for the quarterly electronic report and $350/year for the quarterly hard copy report, making their prices $220 and $280, respectively.

Despite housing-market turmoil and economic uncertainty, community banks are mildly optimistic about increasing mortgage lending this year, according to the American Bankers Association's 15th annual Real Estate Lending Survey released February 21. Thirty-nine percent of survey participants predicted that they would increase their single-family lending in 2008, while another 39 percent said lending volume would remain the same. The report cautioned, however, that such optimism may be waning and sentiments vary by location. The survey also showed that participating banks held 68.5 percent of their loans in portfolio, with the remainder sold into the secondary market, and that fixed-rate loans accounted for 76.2 percent of loan production, up significantly from 64.7 percent the previous year.

More optimism than pessimism was also expressed in the areas of commercial real estate, multifamily, home equity and reverse mortgage lending. Survey participants forecast a decrease only in construction lending.

"This forecast is consistent with the often expressed view that community banks are well positioned to gain market share as other lenders falter," said Robert R. Davis, ABA executive vice president for housing finance and risk management. "Community banks were largely focused on prime lending (much of it conforming loans) and were not involved in making the types of subprime loans that are leading the way to the large delinquencies and foreclosures," he added.

The survey was compiled from responses by 248 community banks. It was conducted in the fourth quarter of 2007, with information from January 1 through September 30, 2007. The report is available at www.aba.com/aba/documents/News/RELsurvey.pdf.

The American Society of Farm Managers and Rural Appraisers has named James B. “Nardie” Vine, ARA, and his wife, Lynda Perry Vine, as the Appraisal Professionals of the Year, February 20 in San Diego at its annual meeting. The award honors outstanding ASFMRA member achievement in the profession.

“Nardie,” a Texas A & M University graduate, has worked in the profession since 1969 and in his own business, Vine and Associates, since 1971. Lynda has been an active part of Vine and Associates since 1981. The company’s offices are in San Antonio, Texas. He received his ARA designation from the American Society of Farm Managers and Rural Appraisers in 1986.

Lynda has been very active in the Foundation Appraisers Coalition of Texas and serves as the organization’s Executive Director. In 2006 Lynda was awarded the ASFMRA Gold Plow Award for having served as the Texas Chapter of the ASFMRA for 20 years.

The January/February Spotlight on the Appraisal Institute features articles on how appraiser coercion has impacted the profession and the steadily growing demand for eco-friendly residential properties.

Spotlight on the Appraisal Institute is a compendium of national press clippings that comprise Appraisal Institute members, staff or policies. Since Spotlight is a member-only benefit, intended to keep members up-to-date on the Appraisal Institute’s visibility in the media, a member login name and password are required.

In light of the launch of the redesigned Web site, this month’s stories are housed as separate PDFs. To view, visit:

www.appraisalinstitute.org/ano/downloads/Spotlight_BCOCinc_0108.pdf

www.appraisalinstitute.org/ano/downloads/Spotlight_HonoluluAdv_0208.pdf

www.appraisalinstitute.org/ano/downloads/Spotlight_MNStarTrib_0108.pdf

www.appraisalinstitute.org/ano/downloads/Spotlight_SmartMoney_0108.pdf

www.appraisalinstitute.org/ano/downloads/Spotlight_StPetersburgTimes_0108.pdf

www.appraisalinstitute.org/ano/downloads/Spotlight_VOSanDiego_0108.pdf

In a recent 45-Day Notice, the Appraisal Institute Board of Directors announced a proposal to move members who are licensed appraiser trainees from affiliate membership to associate membership. In addition “aspiring appraisers” would also be able to apply for associate membership. The Board will meet March 26 to amend the Bylaws accordingly with the goal of implementing the change in the first quarter of 2008. The move comes as part of an aggressive membership recruitment program being initiated this year in which the Appraisal Institute aims to add 5,100 new members.

According to the proposal, dues for trainees and aspiring appraisers would be $95 for 2008. Aspiring appraisers are described as individuals seeking a trainee license or equivalent from their state but who have not completed the education required for such license. Such individuals may qualify for this status for a maximum of two years. Licensed appraiser trainees are those appraisers who hold a trainee or equivalent license.

In November 2007 the Board adopted changes to the Bylaws allowing trainees to become Affiliate members; however, because the Affiliate category is designed for members who do not perform USPAP-related work, it is more appropriate to have trainees positioned under the Associate category, according to the proposal’s rationale.

Appraisal independence was among the hot topics during a February 13 conference call by the Appraisal Institute’s Washington, D.C., office. Over 30 State Government Relations representatives from around the country took part in the call, which addressed current federal legislation, blacklisting and anonymous board complaints.

The call included an overview of last November’s passage by the House of legislation promoting appraisal independence, promoting appraisal designations and increasing enforcement. The bill was originally introduced as H.R. 3837 but was later rolled into H.R. 3915, and then passed through the House. On the Senate side, Sen. Chris Dodd, D-Conn., introduced legislation (S.B. 2452) that prohibits appraisal pressure as well.

“Unfortunately,” according to Justin Morton, Appraisal Institute State Government Relations representative, “Dodd’s bill includes provisions that would require appraisers to become bonded, plus the bill also includes other detrimental provisions.” Morton said the D.C. office is working closely with Dodd's staff to remove these provisions of the bill, and is confident they will be eliminated. The next step is a hearing for Dodd's legislation, which currently has not been scheduled. Morton says it is hoped this will occur by mid-March.

Related to appraiser pressure, Morton also discussed the blacklisting of appraisers, asking call participants whether there is a legislative solution. One response was to write a letter to the president of the company doing the blacklisting and carbon-copying the local office of the Office of Thrift Supervision. Other participants thought that including blacklisting in appraiser-coercion language would be a strong deterrent. South Carolina and Minnesota have such language, and Hawaii is attempting to include such language in its bill.

“It will be interesting to see whether such language can pass through the legislative process and become enacted into law,” Morton said.

Listeners also considered the effectiveness of allowing individuals to file complaints anonymously with their state appraisal boards. Oklahoma is considering such a bill this year. “The ultimate concern is the potential for abuse,” Morton said. “Anonymous complainants can use the process to tie up an appraiser, or they can use it as a means of impeaching an appraiser during a court hearing. On the other hand, anonymous complaints do allow appraisers in smaller communities to lodge complaints without fear of retribution,” he explained.

“This is an issue that is likely best resolved, state by state,” Morton said.

The South Carolina legislature is weighing a bill that would amend current state law to make it illegal for a person with an interest in a real estate transaction involving an appraisal to commit any act that impairs the independent judgment of the appraiser in carrying out the appraisal assignment.

It specifically prohibits such persons from blacklisting, boycotting, bribing, coercing, extorting, intimidating or threatening an appraiser or other acts “tending to result in the improper influence and impaired independent judgment of a real estate appraiser in the development, reporting, review or result of his appraisal assignment including comp checking.”

The bill defines “comp checking,” or “preliminary appraisal,” as “a value indication by an appraiser of a property before completing the work required to render a reliable value conclusion.”

Among those the bill lists as having an interest in a real estate transaction, or the financing of a loan secured by real estate, are mortgage lenders, mortgage brokers, or mortgage originators; real estate brokers, real estate agents, or real estate salespersons; attorneys; clients; appraisers; landowners; or any other person who is a party to or has a pecuniary interest in the transaction or financing.

According to the bill, the unlawful acts include, but are not limited to:

(1)    withholding or reducing, or threatened withholding or reduction, of a payment of the appraisal fee based on the opinion, conclusion, or valuation of the appraisal report including comp checking;

(2)    conditioning payment of the appraisal fee on the outcome of the opinion, conclusion, or valuation of the appraisal report including comp checking; or

(3)    requesting that the appraisal report, including comp checking, results in a predetermined opinion, conclusion or valuation.

However, the bill does allow for persons to request that the appraiser: consider additional appropriate real estate information; provide further detail, substantiation, or explanation for the opinion, conclusion, or valuation; or correct errors in the appraisal report.

The full text of the bill is available at http://tinyurl.com/2glhpa. If passed, it would take effect upon approval by the Governor.

Hawaii’s S.B. 2407 also would make it illegal for anyone with a financial stake in a real estate transaction to influence an appraiser. At a February 4 hearing, state regulatory agency employees and local appraisers testified about the industry pressure.

State Sen. Gary Hooser, who introduced S.B. 2407, said he was shocked by initial testimony on the bill, which he said he introduced at the request of a constituent who is an appraiser. "I didn't really understand the scope of the problem," said Hooser, who is a licensed real estate agent. "I've learned there are some real issues here that need to be dealt with."

In addition to South Carolina and Hawaii, several states have introduced appraisal independence legislation this year, including Arizona, Minnesota and New Hampshire. The last couple of years, similar legislation has passed in other states. “As such, it is expected that these bills will likely see favorable action this year as well,” according to Justin Morton, Appraisal Institute State Government Relations Representative.

The Pennsylvania legislature is currently weighing a bill that would prevent appraisers from accessing real estate data. The bill, S.B. 1, would also make it unlawful to use such data for commercial purposes.

Noting that it is extremely close to passing the legislature and becoming law, the Pennsylvania Chapter of the Appraisal Institute urges Pennsylvania appraisers to contact their State House Representative and urge them to oppose this legislation.

To visit the Action Alert that enables appraisers to do so, visit http://capwiz.com/appraisal/issues/alert/?alertid=10972651&type=ST.

The Kansas Legislature has introduced a bill that will require all property in Kansas to be appraised by a licensed or certified real estate appraiser. Under the current law, only federally related transactions require a licensed or certified appraiser.  The legislation, H.B. 2772, includes certain exceptions for lenders, such as not requiring a licensed appraisal if the bank does not plan on selling the property to the secondary market.

The measure, sponsored by the Committee on Commerce and Labor, is available at www.kslegislature.org/bills/2008/2772.pdf.

Motivated by the “auditing challenges presented by the subprime credit situation and its effects on the markets and fair value measurements,” the Public Company Accounting Oversight Board has published a Staff Audit Practice Alert on the audit of fair value measurements in financial statements. The alert provides auditors with additional information related to auditing fair value measurements and disclosures, as well as the use of specialists in this area.

The alert also comes in response to “certain issues that might arise in the transition to Statement of Financial Accounting Standards No. 157, "Fair Value Measurements," according to Marty Baumann, Director of the PCAOB Office of Research and Analysis.

Released December 10, the PCAOB alert, Matters Related to Auditing Fair Value Measurements of Financial Instruments and the Use of Specialists, highlights certain matters in four areas:

• Auditing fair value measurements;
• Classification of fair value measurements within the fair value hierarchy established by SFAS 157;
• The use of specialists in fair value measurements; and
• The use of pricing services in fair value measurements.

"This alert does not create any new auditing requirements," said Tom Ray, PCAOB Chief Auditor and Director of Professional Standards. "Rather, we issued the alert because we believe it will be helpful to auditors as they gear up to complete their year-end auditing work by reminding them of certain aspects of the auditing and related accounting standards that are particularly relevant at this moment."

The full alert is available at www.pcaobus.org/Standards/Staff_Questions_and_Answers/2007/12-10_APA_2.pdf.

Zaio Corporation has acquired the technology assets of Appraisal.com, a nationwide firm serving lenders and appraisers. According to a release, Appraisal.com technology is used by more than 100 lenders, 7,500 Day One appraisers and 9,184 appraisers in the company’s nationwide appraisal network. Zaio currently manages a network of about 9,000 appraisers and nearly 500 lenders.

Zaio is a technology and database company that maintains a database of 140 million properties. Its network of local appraisers photograph, inspect and appraise entire cities, one building at a time, via Zaio Zones. In order to ease the transition, Zaio is offering Appraisal.com lender customers a limited-time discount on appraisal orders and Day One appraisers free extensions on software renewals. Additionally, Day One and United Systems appraisers may purchase Zaio Zones at a discount through April 30. 

Jim Kirchmeyer, Zaio Chief Marketing Officer, said Appraisal.com lenders and Day One appraisers should experience no disruption in service, and that the company’s Buffalo, N.Y., office, where Appraisal.com’s headquarters were located, will run Appraisal.com’s transactions.

The Winter 2008 issue of The Appraisal Journal examines the distinctive characteristics of special property interests – a key step in developing a valuation estimate. Featured articles specifically focus on the unique aspects of aircraft hangars, water rights, limited use service hotels, industrial incubator warehouses and apartments, and how these special properties are valued.

The spotlighted article, “An Introduction to the Valuation of Aircraft Hangars,” by Timothy J. Lindsey, provides an overview of the general features that appraisers take into consideration in the valuation and analysis of aircraft hangars. The article examines characteristics that affect value such as: location, structural systems, hangar features, property rights and leases tied to fuel consumption. In a subsequent article which will appear in the Spring 2008 issue of The Appraisal Journal, Lindsey will illustrate specific appraisal techniques for valuing aircraft hangars using the characteristics described in the current article.

“The Appraisal of Water Rights: Their Nature and Transferability,” by Steven J. Herzog, MAI, identifies the types of water rights and ownership interests that may be the subject of an appraisal. The author stresses the importance of the need for appraisers to familiarize themselves with the rules of each state in which water rights exist, as there is variability among these states. This article is part one of a two-part article; an article in the next issue of The Appraisal Journal will address the appropriate appraisal methodology to use in valuing water rights.

In “Valuing Limited-Service Hotels: A Pragmatic Framework from a Broker’s Perspective,” Byron B. Hinton, MAI, bridges the gap between the theoretical framework typically used for valuing hotels and the real world motivations and behaviors of buyers and sellers in transactions involving limited-service hotels. Hinton discusses both objective and subjective factors that ultimately influence a purchaser’s willingness to acquire a property and concludes that by considering these factors a hotel appraiser can approximate the thinking of active buyers and sellers in the limited-service hotel marketplace.

In “Industrial Incubators; Key Characteristics That Impact Value,” the authors Donald Sonneman and David J. Yerke, MAI, describe the various characteristics that distinguish multi-tenant industrial incubator properties from other types of warehouse properties. The authors note that small industrial warehouse users have different needs and priorities that influence design and appraisal analysis. They conclude that an awareness of the key characteristics that differentiate the industrial incubator category from other industrial property types will assist appraisers in selecting proper comparable properties and making appropriate adjustments.

Rounding out the articles on special property types is “Apartment Market Analysis,” by Richard L. Parli. MAI, who presents a six-step process that lays out a road map to guide the market analysis. The purpose of the market analysis is to investigate the marketability and feasibility of a property’s potential uses, which ultimately leads to a conclusion of the property’s highest and best use. The article includes a case study illustrating how a market analysis is conducted for existing apartment properties.

The Appraisal Journal, published quarterly by the Appraisal Institute, serves as a forum for advancing appraisal theories and practices. Containing articles, columns and letters written by experienced appraisers and educators, The Appraisal Journal presents ideas, concepts and analytical techniques to be considered. Each issue offers alternative valuation methods for serious thinkers seeking creative solutions to appraisal problems, appealing to appraisers, educators and other real estate professionals.

For more information about The Appraisal Journal or for review copies, please contact Nancy K. Bannon at 312-335-4445 or nbannon@appraisalinstitute.org.

The "dean of St. Louis appraisers," Thomas J. "Tom" McReynolds III, MAI, died January 26 at St. Agnes Home in Kirkwood, Mo. He was 92. He is the father of Thomas R. McReynolds, MAI, and long-time associate member Ann R. McReynolds, both of whom worked for their father during the course of his career.

Over a 60-year career, McReynolds appraised property such as Onondaga Cave, the Forest Park Highlands, Mill Creek Valley, the Arena and the right of way along the future Interstate 44. He also appraised property for the Atomic Energy Commission in the 1950s. During World War II, he worked at the Curtiss-Wright aircraft plant. He then was director of research for Roy Wenzlick & Co., contributing articles to The Real Estate Analyst. He started his own business, McReynolds Appraisal Co., in 1956, which he operated until retiring in 2005.

McReynolds taught for the Appraisal Institute and at local universities and served as an expert witness in many federal and circuit court cases. It was his students who nicknamed him The Dean. "He was known for his clear writing style and his dislike of jargon. He surrounded himself with young people and loved to teach," said daughter Ann.

"He was most proud of the scenic easement work he did for the National Park Service and U.S. Forest Service along the Current, Jacks Fork and Eleven Point rivers for the National Scenic Riverways," she said.

In 1957, a year after opening his business, McReynolds received his designation from the American Institute of Real Estate Appraisers, which became the Appraisal Institute. He was also a charter member of the St. Louis chapter of the Society of Real Estate Appraisers.

Memorial contributions may be made to the Appraisal Institute Education Trust, 550 W. Van Buren Street, Suite 1000, Chicago 60607, or the Missouri Botanical Garden, Kemper Gardening Center, 4344 Shaw Boulevard, St. Louis 63110.