Townsend Appraisals

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Townsend Appraisals and Peter and Nancy Townsend were featured this month (September 2010) in Appraisal Today, the premier real estate appraisal periodical. The focus was on how the Townsends have adapted their business to the changing marketplace and evolving needs of the appraisal profession.

The article describes how the Townsends use division of labor, their commitment to being a green appraisal company, and some specific issues related to appraising as a family business. For instance, the article discusses the value of record keeping, the importance of vacation, and the need to save for retirement. There are a number of candid photos of the couple [see the full article and scroll to the bottom for photos], including some of the San Francisco area. The five page feature is a welcome recognition of this California appraisal company. Townsend appraisals covers Contra Costa County and Alameda County in California.

Richmond was hit very badly by the market downturn starting in the autumn of 2006.    It continued to fall until around June in 2009 and now shows  signs of improvement as of February 2010.  North and East Richmond shows this upward trend.

Click on Chart to Enlarge

If you look at the tend of the cost per square foot on the chart on the right you’ll see that market bottomed  out in North and East at about $155 sq ft of gross living area and has since risen to about $175 per square foot.  The average cost of a house here was about$173,000 from February 2009 to August of 2009. Since then it has risen to $186,000 average in the last three  months.

The market is still dominated by distressed sales which includes REO’s which are foreclosures and short sales where the seller is attempting to sell the house for less than is owed.  Of the 26 sales in the last 3 months 69% were distressed sales.

Values in the Montclair neighborhood in Oakland, CA  are holding up fairly well compared with many areas.  Since early 2006 to the present, prices have declined approximately 20% , from about $450/sf to about $360/sf. The market appears to be stabilizing at this time, as it is in much of the Bay Area.

Click on Chart to Enlarge

The chart displayed is a regression analysis of sale in Montclair since 2006.  Each point on the graph is a home sale expressed in $/sf.  This analysis basically draws a trend line equidistant from all points (using a 3rd factor polynomial).  There is a wide variation in price/sf in Montclair.  Views, construction quality, house size, condition, and lot size vary substantially.  All these impact the price/sf.  Web sites for evaluating the value of your house just can’t take this into consideration.  There is still a job for appraisers.

After we say hello, we measure the exterior of your home and draw a diagram of the exterior walls.  We photograph the front, rear and street scene of your home, and possibly other amenities such as a view, pool, decking, patio, landscaping, etc.

Once inside, we measure the garage (if it is attached) and indicate where rooms are located on the diagram we have drawn.  Typically, we do not measure interior walls.  We do take interior photographs, primarily of the the living room, kitchen, baths, and may take a photograph of every room in the house.

We note the following: flooring materials used throughout, tub/shower surround materials, any significant deferred maintenance (ceiling leaks, very old roofs, torn carpet, etc.)  We will ask you if there is anything you would like to tell us about your home.

A typical appointment takes between 15 – 45 minutes, depending on the complexity of your house.

We have been appraising in Rodeo since Nancy first got started in the appraisal business more than 22 years ago.   Rodeo is a particularly dynamic market and very sensitive to the overall forces affecting real estate.  Accordingly, during the up years it rose quickly and  in autumn of 2006, it sank like a stone.

The chart at the right gives you an idea of what I am talking about.  It starts  at the beginning of 2006.  I have plotted the dollars per square foot of  gross living area  of the houses  in Old Rodeo as it changed with time.  The all-time high of $400/sq ft  occurred around mid-summer in 2006 and began to drop rapidly  in the fall.  It continued to plunge downward until around August 2009, where it settled at around $125/sq ft. That was a 69% drop in value! At this point in time we  see the market start to pick up.

Almost all the local sales are foreclosures or short sales. In 2009, there were 67 sales,  50 of which were foreclosures (REOs) and 7 of which were short sales.

Home prices are being set by these distressed sales and this may continue for some time. Nevertheless, it looks like at this point we may have hit bottom as far as prices go.  It may be a good time to buy!

We are all hearing  about banks helping — or not helping –  folks having trouble paying their mortgage payments. In many cases, the people that are being helped, 40 or 50% of them, default on their loans a few months after  the loan was restructured.

Restructuring almost always  extends the term of the loan or reduces the interest temporarily.  Seldom is the principal of the loan reduced.

This may change. Owners  that are under water, that is they owe more than their homes  are worth, which  here in California are about 1/3 (and in neighboring Nevada is 2/3!), have little incentive to make their payments  or take care of their homes.  Lets face it, they feel more like renters than owners.  So some banks, Wells Fargo, for instance, are reducing the principle owed or deferring payment of the principle.  In the case of  a principle reduction, some of the loan is forgiven.  In the case of deferment a  part of the principle  is deferred until the time when the owner sells the house, at which time he has to pay back the amount of principle  that was deferred.  Either way, the owner is more  motivated to stay put and continue making payments, now at a reduced level. We are hoping it works.  An agent recently told us she knew 6 people living in El Cerrito or nearby communities that hadn’t made payments in over a year but had not been foreclosed upon.  We suspect there are a lot of people out there like that which means foreclosures may increase and extend over a lot longer time.   Let’s hope effective action of some kind can be taken.

Townsend Appraisals is a green company.  Peter, with his engineering background, has a passion for saving energy.  We strive to incorporate an environmentally friendly attitude into all of our business activities: we drive a Prius to our appraisal appointments, we recycle all of our paper, we have a compost bin, we use flourescent lightbulbs,  and we have replaced plants in our garden with native Californian, drought-friendly varieties.  Peter has even charted our energy and water use since 2002 & we are proud to say that the trend is down.

Appraisal consulting is useful in a variety of situations. Before putting their home on the market, some clients wish to have an idea of what is a fair market value for their home. There are also clients who wish to know what they can do to maximize the value of their homes before selling them. We can tell you what makes a difference in property value so you can get the most “bang for your buck” when you are considering different improvements for your home. We can also estimate diminution in value for your property, if this should occur.  For example, if your neighbor’s tree grows and blocks your view, we can estimate the loss in value to your property.
Another situation in which clients seek appraisal consulting is in order to have an accurate record of their property’s square footage, as county records frequently do not accurately reflect the correct size and room count of a dwelling.

How we’re different: At Townsend Appraisals, we limit our market area to Contra Costa and Alameda Counties.  This enhances the quality of our appraisals and the level of trust that our clients experience.  We have 36+ years of combined appraisal experience.  Combined with commitment to be active in the appraisal community through speaking at Appraisal Institute conferences and other volunteer activities, we stay aware of the latest market trends, and have a network of skilled and competent professionals.

The Story of Townsend Appraisals starts in 1986.  Nancy began appraising when interest rates started to drop after they had been at historical highs for a number of years.  She was mentored for five years by Donna Neff, an experienced appraiser in Orinda.  In 1991, she started her own business.  To optimize her competence and skills as an appraiser, she obtained her SRA designation from the Appraisal Institute in 1993. She is a certified expert witness in Contra Costa and Alameda County Superior Courts, as well as in Alameda Bankruptcy Court.  Her husband Peter joined her in 2001, having previously worked for over twenty years as a manager in metallurgical engineering.  His analytical mind has been a great contribution to Townsend Appraisals.