The Crosstown Blog

Target Property: A 2,000 sqft town home built in 1975 in the Oakbrook neighborhood of Farmers Branch. The annualized MLS data of comparable town homes, 1/2-duplexes and Zero-lot patio homes within the Carrollton/Farmers Branch school district market area was analyzed as follows:

Year    # Sold    Forclosures    Median Sale    Price/sf    List/Sale    DOM

2009    23            17%        $112,500      $65.50/sf    97%        86

2010    14            36%        $127,000      $65.12/sf    97%        81

2011    21            33%        $94,500        $55.75/sf    96%        128

2012    24            38%        $96,250        $58.62/sf    95%        83

2013    24            17%        $112,250      $67.37/sf    97%        96

Market Area Comparable "Active" Status:

Listed: 4 properties

Average List $: $159,850 (1,781 sf built in 1974 at $87.71/sqft)

Days on Market: 65

Inventory: 1.7 months at 2.4 sales/month in 2013

Foreclosures: 0

Search of comparable MLS listings and sales reveals that demand/supply levels are under-supplied with only 4 comparable listings. The median sale price has increased from 2011 through 2013; however, mitigated by the preceding 12-month analysis indicating a down-turn in the past 3-months. Overall, this is interpreted as current stability of market area values for comparable town home and patio home products. Furthermore, positive indicators are show in the Active inventory including higher list prices, declining days on market, no foreclosures and low inventory.


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Posted by Clay Bonner on November 6th, 2013 8:01 PMLeave a Comment

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Target Property: A 2,700 sqft home built in 1977 in the Prestonwood neighborhood of North Dallas.  The annualized MLS data of comparable homes within the Prestonwood market area was analyzed as follows:

Year    # Sold    Forclosures    Median Sale    Price/sf    List/Sale    DOM

2009    51            6%            $297,500    $105.59    96%        61

2010    66            2%            $276,700    $103.71    97%        61

2011    64            2%            $270,000    $102.28    96%        65

2012    78            1%            $304,000    $111.98    97%        61

2013    73            4%            $315,000    $117.92    99%        30


Market Area Comparable "Active" Status:

Listed: 12 properties

Average List $: $358,017 (2,707 sf built in 1977 at $132.79/sqft)

Days on Market: 25

Inventory: 1.6 months at 7.3 sales/month in 2013

Foreclosures: 0

Search of MLS listings and sales reveals that supply levels are under-supplied with less than 2 months of existing inventory. Median and average property values declined in 2010 and 2011, but appear to have rebounded in 2012 and increased in 2013. Furthermore, Active inventories show positive indicators such as high average list price, low inventory and low days on market.  It is very common for sellers to offer 1% to 2% "seller paids" for buyer's closing expenses and historically occur in 1/3 of all transactions with the trend currently high in frequency (44%) but low in dollar amounts (1.1%).

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Posted by Clay Bonner on October 22nd, 2013 10:47 AMLeave a Comment

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The answer is Yes, but the rules for qualification vary per state. Some of the required education crosses over, too. You will be able to become a licensed Real Estate Salesperson quicker than you can become a licensed Appraiser. Either way, just be sure you have a back up source of income while you are getting your feet wet in either field. 9 out of 10 Realtors don't make it past their first year. And finding an Appraiser Sponsor will be difficult without pledging a full-time committment during your 2-year apprenticeship.

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Posted by Clay Bonner on February 3rd, 2011 4:15 PMLeave a Comment

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October 7th, 2010 7:45 AM

According to, here's the latest rundown:

Central Air Conditioner....11 years

Window Air Conditioner....9 years

Trash Compactor....6 years

Dishwasher....10 years

Electric or Gas Dryer....12 years

Washer....11 years

Garbage Disposal....9 years

Heat Pump....12 years

Microwave....9 years

Electric Range....16 years

Gas Range....17 years

Refrigerator....12 years

Electric Water Heater....13 years

Gas Water Heater....11 years

When I pull out my old list from 2006, decreases are noted in HVAC, the fridge and the washer; and only the dryer appears to have increased its longevity.  Why does the appraiser need to put this useful information in a file folder?  When an appraisal is completed on a rental property, the lender usually wants an analysis about the income-generating ability of the property (since that's usually part of the borrower's financial picture).  Just like appraising the value of the property, a market rent for the property is also determined by comparing our house to others that are currently rented.  In the final step, a monthly cash-flow is determined and part of the expenses are reserve amounts set aside for appliance replacement.  So if your $1200 Kenmore fridge only last 12 years, then $8.30 is deducted from the monthly rent as part of the reserve replacement expense.  Ultimately, after making deductions for other appliances, household systems, mortgage, insurance, etc., then the monthly cash-flow is revealed.

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Posted by Clay Bonner on October 7th, 2010 7:45 AMLeave a Comment

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Does this mean that your property is now going to appraise for 4.3% less than last year?  There is a chance, but probably not.  This is a county-wide average, so some market areas do better than others.  Addison is down 7.6%, Carrollton is down 4%, Highland Park down 3%, Sunnyvale up 1.5%.  Here's an insider secret: what happens in Sunnyvale has nothing to do with what happens in Highland Park.  As long as the three most important thing about real estate ares location, location and location, the overall averages that make-up the headlines can only serve one, but very big purpose: it plants the seed in the homeowner's mind that there property may have declined by 4.3%.  This makes things so much easier for the appraiser who comes along and appraises it for less than they bought it.  Typically, North Texans have been spoiled from about 1992 through 2007 that there property value would inch-up every year.  Dare an appraiser check the box "declining market" and there would usually be a ruckus with the homeowner, Realtor and loan officer (never mind that plenty of lenders have always made loans in declining markets).  All the doom and gloom in the DMN over the past two years has enlightened real estate professionals and homeowners alike that the price of real estate changes every day - for better and for worse.  Thanks, Steve!

PS:  The municipal winner of the 2009 to 2010 change was Hutchins, up 14.4%.  This does not mean that your $100,000 house in 2009 is now worth $114,000.  The statistic reflects the change in averages; so, your old $80,000 house built in 1975 is now paired with a newly-constructed $110,000 house.  Where the average used to be $80,000, it's now $95,000; hence, a 14% increase in the overall value.

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Posted by Clay Bonner on August 22nd, 2010 9:48 PMLeave a Comment

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Does this headline or advertisement appear in Friday's Real Estate section every week?  Seems like it.  Let's see what they're saying:

07/17/10: Dallas Morning News: Record low mortgage rates attract buyers (Nationwide average) 30yr Conv. FRM 4.58%, 15yr Conv. FRM 4.04%

07/23/10: Dallas Morning News: 30-yr fixed rate hits record low of 4.56% (Nationwide average) 30yr Conv. FRM 4.56%, 15yr Conv. FRM 4.03%

08/06/2010: Dallas Morning News: Mortage rates dip below 4% (Nationwide average) 30yr Conv. FRM 4.49%, 15yr Conv. FRM 3.95%

08/13/2010: Dallas Morning News: 30-year rates at another modern low (Nationwide average) 30yr Conv. FRM 4.44%; 15yr Conv. FRM 3.92%

08/20/2010: Dallas Morning News: Mortgage rates drop once again (Nationwide average) 30yr Conv. FRM 4.42%; 15yr Conv. FRM 3.90%

08/27/2010: Dallas Morning News:  Mortgage rates drop even further (Nationwide average) 30yr Conv. FRM 4.36%; 15yr Conv. FRM 3.86%

09/03/10: Dallas Morning News: 30-, 15-year mortage rates decline to record lows (Nationwide average) 30yr Conv. FRM 4.32%; 15yr. Conv. FRM 3.83%

10/01/10: Dallas Morning News: Mortgage rates are down again (Nationwide average) 30yr Conv. FRM 4.32%; 15yr Conv. FRM 3.75%

10/08/10: Dallas Morning News: 30-yr rates fall to lowest since 71 (Nationwide average) 30yr Conv. FRM 4.27%





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Posted by Clay Bonner on July 24th, 2010 8:41 AMLeave a Comment

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re: Dallas Morning News: Rigid HOA standards defended, criticized 

I thought the arbitrary foolishness of the Stonebriar HOA's definition of a pick-up truck was fairly entertaining, but this article in Sunday's DMN reveals a certain Colleyville HOA's uber-control at the apparent hands of a single individual - the developer.  The kicker with all HOA rules is that the homeowners legally agree to them when they purchased the property.  What makes this HOA story unique is how these homeowners are not and probably never will be in control of their HOA.  They belong to a Developer-Owned Association.

The particular rules of this Colleyville HOA are a mix of good and bad, but it sounds like the overall problem is that the developer, who views his communities as children, doesn't treat the homeowners like adults.  Here's a run-down of items mentioned in the article:

Having the developer in sole control of the HOA: Bad.  He can, and has, raised dues without the votes of the homeowners.  Even to go so far as to levy a special assessment for legal fees.  Ironically to fight against the same homeowners suing in court. 

Architectural Control Committee: Good.   I have seen $1,000 coach lamps that are too small for the house they were hung and they look terrible.  Same effect to those that are too big.  Does it affect the sale price of the house across the street?  No.

Fees to review homeowners' plans: OK.  Variable fee: Bad.  Repeat fee for repeat submissions after the first rejection:  Worse.

Only using the HOA's approved list of contractors: Bad.  Price fixing, colusion, etc. obvious.  Solution already in place: architectural control committee.

Ability to amend or abolish existing CCR's without homeowner vote: Bad.

Relinquishing HOA control to homeowners after the last lot is sold: Bad.  Most I've run across relinquish after a majority percentage.   This developer can stay in contol forever now.

Taking months to approve ACC plans:  Bad.  This is where the developer exhibits his lack of respect for his homeowners.  The article cites many examples of unfinished works-in-progress pending some sort of approval.  

Having to acquire ACC approval for flower beds in the back yard: Bad.  It's behind the fence! 

Help is on the way for the Westmont HOA, recently relinquished to Paul Kramer of Castlegate Homes.  Paul intends to maintain the uber-high standards of the ACC, but sounds like he also intends to restore respect between the HOA and homeowners by streamlining the approval processes.  I did some appraisals for Paul many years ago in Colleyville and Vaquero (the kind of homes so awesome you'd never forget).  Paul was a nice guy with very good taste - although I'm still undecided about Jenny's house.

Moral of the story:  HOA's are usually fine.  But I think many people just assume that the HOA will be just like most HOA's, perfectly amicable, and don't read the 40-page CCR presented at their closing table.  But then later discover, after it's too late - au scheisse!    

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Posted by Clay Bonner on March 28th, 2010 9:19 PMLeave a Comment

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October 26th, 2009 4:30 PM

The county tax record does not classify properties as Rural, Suburban or Urban.  This designation is left up to the appraiser’s judgment.  The issue is complicated by the fact that Fannie Mae has no definitions for these three words.  Thus, this is one of the most debated topics in appraisal classes.

For example, a home on 10 acres can be located in an unincorporated part of Collin County north of Frisco but south of 380 and have a Frisco mailing address, located in the Prosper ISD, have a septic sewer and the owners work in McKinney.  The arguments can be made for both Rural and Suburban based on location, proximity to major employment, view, and surrounding land use, septic vs. public sewer, distance to nearest Dairy Queen, etc.

However, I do not know any appraisers that would not label a property inside the Frisco, Prosper or McKinney city limits as anything other than Suburban. Also, land size alone does not automatically determine a designation.

Rural is probably the designation that I have used least often. I usually designate a property Rural when on the fringes of the outlying counties, on unincorporated land with vacant (agriculture) being the predominant surrounding land use.  It’s usually obvious and rarely contested.

Urban is usually saved for the large metropolitan areas. But even in Dallas my guideline is that inside Loop 12 is Urban, and outside is Suburban.  Addison Circle is a nice area but isn't exactly like West Village and Knox-Henderson.  

I hear this sometimes:

If you walk out to get the morning paper naked and nobody complains, that’s Urban; if a neighbor complains, that’s Suburban; if nobody can see you, that’s Rural.


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Posted by Clay Bonner on October 26th, 2009 4:30 PMLeave a Comment

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March 23rd, 2009 12:13 PM

This is a work in progress in the collecting data stages - not sure where this is headed.  It's a frequent concensus in peer conversation that the Dallas Morning News prints more negative Real Estate headlines than positive.  In February I started saving the headlines and keeping score.  This will be a running blog entry, so it will change often.

Negative: 28          Positive: 31         Neutral: 3

02/17/2009: D-FW home starts may decrease 20%

02/19/2009: Area's home prices up in study

02/02/2009: D-FW fares better in affordability

02/23/2009: New home sales probably at a low

02/25/2009: Home sales indexes show a mixed bag for North Texas prices

02/26/2009: Existing homes sales sink (US)

02/27/2009: A floodplain of foreclosures

03/04/2009: Luxury home postings see sharpest rise

03/04/2009: Pending sales of existing homes reach a record low (US)

03/05/2009: 21% of Dallas-area borrowers are underwater

03/11/2009: Existing home sales slid 28% last month

03/20/2009: Dallas-area postings approach record level

03/24/2009: February homes sales top January figure (US)

03/23/2009: Survey shows area home-price gain

03/28/2009: First-time homebuyers report burgeoning interest (US)

04/01/2009: Dallas housing prices faring well

04/02/2009: Home prices' risk of falling still low (US)

04/08/2009: New-home sales fell 40% in first quarter

04/17/2009: A 5-year supply depresses prices of empty homes site in D-FW

04/24/2009: Pain spreads across Dallas area

04/29/2009: Dallas home prices fare well in survey

04/29/2009: Property values for '09 slide in Dallas County

05/05/2009: Construction spending, index of pending home sales rise

05/06/2009: Few mortgagors owe more than home's value

05/08/2009: Dallas getting more affordable, report says

05/13/2009: Foreclosure sales drag prices down

05/14/2009: Survey - most think the worst is over (US)

05/19/2009: Sentiment index jumps 2 points (US) 

05/20/2009: Area 2nd in new houses

05/20/2009: Home construction see small rebound (US)

05/22/2009: Denton property values inch up

05/27/2009: Index: Area home prices falling faster

05/28/2009: Area home prices edge up in study

05/29/2009: Texas' rate half that of US

06/03/2009: Pending home sales rise 6.7%

06/05/2009: Study says D-FW area undervalued

06/09/2009: North Texas homes sales fall

06/19/2009: Foreclosure listings top record high

06/23/2009: Metro area home prices go retro

06/24/2009: Dallas area ranks high in home price forecast

07/01/2009: April prices fall 5% in year

07/03/2009: Economy putting spec homes in check

07/08/2009: Area home prices face less-precarious future

07/08/2009: North Texas new home sales, starts plunge in 2nd quarter

07/17/2009: Housing recession hits Dallas' heart

07/17/2009: Area foreclosures slip under 5,000

07/18/2009: Home construction jumps in June

07/20/2009: Home sales probably on rise in US

07/24/2009: Pre-owned home sales climb for a third month

07/25/2009: Tax base drops 3.1%

07/28/2009: US Home sales rise for 3rd month

07/28/2009: Economist: Worst of the housing recession in now behind us

07/29/2009: Home prices improve (US)

08/08/2009: Equity outlook improving in D/FW

08/11/2009: Home resale data offers ray of hope

08/13/2009: Area home prices flatten in survey

08/14/2009: Frisco on unfortunate list

08/14/2009: Foreclosures fall, but recovery unclear

08/14/2009: D/FW foreclosure postings climb 35%

08/14/2009: It's risky to say it, but it looks as if the worst is over

08/17/2009: Housing reports may raise hopes

08/18/2009: More homeowners underwater (US)


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Posted by Clay Bonner on March 23rd, 2009 12:13 PMLeave a Comment

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Last Friday FNMA released Announcement 08-30, which outlined several changes in the way appraisals are to be prepared for mortgage lending purposes. 

The most impactful for appraisers will be the introduction of a new page into the appraisal, called a 1004MC.  This page is intedended to expand on the appraiser's Market Area Analysis.  It seems too often that all of the Neighborhood check boxes are nicely crossed down the middle, and the subject's appraised value is always conveniently near the predominant neighborhood value.  The Boundaries and Description comments are always the same for every appraisal, with the fill-in-the-blanks for streets, cities and school districts changed for the appraisal.  This is one of many reasons appraisers are always under FNMA's microscope, and I don't blame them.

FNMA has now created a whole page devoted to this topic which is usually hurried and completed with indifference by the appraiser.  Ultimately, the goal of this and some other 08-30 revisions are the same as in 2005 when the "new" appraisal forms were released: To make the appraiser do the job they were already supposed to be doing.  Instead of having their readers just take their check-boxed conclusions at face value, appraisers will now have to show their statistical analysis that lead to their conclusions.  I have already been doing this since July 2007, when FNMA started tracking declining markets for themselves and comparing against the appraiser's conclusions.    

Other changes in the Announcement:

  • Supervisory appraisers must actually inspect the subject property
  • Lenders must provide the sales contract to the appraiser
  • Changes in repair escrows between major and minor repairs
  • Entire acreage must be appraised, not just a portion of the whole
  • The HUD-1 of builder-provided comparables must be available
  • Lenders may rely on the "Replacement Value" of the Cost Approach for insurance purposes

The policy changes take effect January 1, 2009; implementation of the 1004MC is April 1, 2009.  See the Announcment here

Wishing you a better 2009!

Clay Bonner - Crosstown Appraisals

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Posted by Clay Bonner on November 17th, 2008 3:44 PMLeave a Comment

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