Summer is here! Time to take that trip to Europe, scale the Himalayas, and hop on a cruise! Or, since we are but humble appraisers, how about a weekend on the beach at Ocean Shores?
Summer also is here for the region’s real estate markets. Vacancy rates are low, rents are increasing, sale prices are through the roof, and cranes are sprouting like the dandelions in my back yard. But while it is tempting to think the good times will last forever, we know they won’t. All this new development will increase competition, driving up vacancy and leading to stagnant or even declining rents. Circle of life.
Remember the recession? With few recent transactions, most at very low prices, we spent a great deal of time trying to convince our clients that things eventually would turn around. We emphasized that placing too much reliance on distressed sales and high cap rates would result in understated values. We urged everyone to recognize that markets are cyclical, and to think long term.
Today, once again, long term thinking is what is needed. Yes, the very similar property across the street just sold above its asking price. And yes, tenants are banging down the doors to occupy our space at absurdly high rents. But if we are going to project the same for our subject property, should we exercise caution in applying sale adjustments, evaluating risk, and identifying appropriate rates of return? And instead of just capping the current income, should we also present a multi-year DCF? Just as most investors look beyond the current bottom line, so should we all.
In any case, it is just too nice a day to worry about it. Maybe I’ll head for the beach.
Have a great summer!
Two FREE Residential Roundtables Coming Up!
Join your fellow appraisers for conversation and pizza! Attendance is free, but please RSVP by email to firstname.lastname@example.org (be sure to indicate which location you want to RSVP for!)
June 22 at 5:00PM
15025 NE 24th St
Redmond, WA 98052
Mount Vernon Roundtable
July 8 at 6:00PM
115 E College Way
Mt Vernon, WA 98273
Leadership Development Advisory Council (LDAC) 2016
by Michael L. Lamb, MAI, SRA, AI-GRS, AI-RRS
The Seattle Chapter sent three representatives: Michael L. Lamb, Mary Campos, and
Olen Miller. Pictured here (L to R) with Senator Cantwell.
LDAC 2016 was a smashing success! The Leadership Development Advisory Council met in Washington DC on May 22 through May 25. The event drew 102 appraisers from 22 different states – including two reps all the way from Honolulu, Hawaii! The event theme is centered around two primary goals – advancing each attendees professional and presenting solutions to make the Appraisal Institute increase its effectiveness in supporting its members while growing stronger as an organization. Currently, the Appraisal Institute has roughly 22,000 members across the US. That membership is dwindling as appraisers are leaving the profession at a higher rate than those entering. Clearly a concern for the long-term viability of the profession, this issue was at the forefront of discussion.
LDAC is structured around four 2-hour Discussion Groups, where four Discussion Leaders – recruited from prior years’ attendees – facilitate discussions around a themed topic. This year’s topics included attracting new members to AI (with a focus on attracting residential appraiser’s to the SRA designation); looking beyond USPAP; strategies for the Appraisal Institute to increase its market share; and Professional Development.
Byron Miller, SRA (Minneapolis, MN) lead the group discussion on attracting new membership. Through his experience as an SRA, Byron facilitated the discussion on the benefits of the SRA designation and brainstormed strategies to increase SRA brand recognition. The appraiser’s quality of work – through the SRA – was targeted as the best marketing tool, while our own outreach – as appraisers – can be utilized to illustrate the value and professionalism that the SFR offers to the greater business community.
Elaine Liz-Ramirez, MAI (Clermont, FL) led a discussion beyond USPAP, reaching beyond a purely USPAP based practice and extending our roles to include promoting the profession and associated designations. Key solutions include pushing out member spotlights via social media – connecting AI designations with personal stories readers can relate to – and establishing a purposeful campaign to sell our profession to the business community. Maintaining the quality of an appraiser’s work was also discussed – leading to proposals of a collaborative peer review for designated members every five years. The intent would be to infuse new technology, methodologies and practices into “legacy” MAIs who may not have a cross-reference of new ideas to help them remain relevant in the market. Other discussions included removing the requirement to follow USPAP for non-Federally Related Transactions…..thereby providing greater fluidity in a scope of work to meet a client’s needs (while leveraging the high-level of professional practice that a MAI / SRA can offer).
Chris Ponsar, MAI, SRA (Honolulu, HI) lead a lively discussion on increasing market share for AI designated members. Expanding International Chapters was at the top of the discussion list, while also reaching out to colleges and universities to establish a fast-track to recruit graduates into the appraisal profession. Other discussions included removing the requirement of designation for all AI members – thereby allowing affiliate membership to those appraisers who appreciate the professional benefit of membership with AI, but are not aligned with the process in getting to an actual designation.
Lastly, Rodman Schley, MAI (Denver, CO) created a platform for appraisers to discuss ‘greatness’ in the profession and the process toward professional development. The discussion identified differing opinions of the word ‘great’ – recognizing that even the great ones have room for improvement – and also aligned great work with the AI brand. The group felt the AI community should be careful about becoming an exclusive organization; rather, becoming an inclusive community where we can share our professionalism while expanding our knowledge through interaction with others. And as a rule, top-tier appraisers can benefit the appraisal profession by mentoring professionals entering the field.
Although representing the core of LDAC, the four discussion groups are far from the entire experience. The afternoon of the second day is spent on Capitol Hill lobbying our Senators and Representatives on concerns impacting our profession. The Seattle Chapter delegation met with intelligent staffers from Senator Murray’s office and Congresswoman Susan DelBene’s office – and we were delighted to spend 30 minutes with Senator Cantwell and two of her top aids to discussion the burden of regulation on our industry and identifying key indicators that align market influences with green building. Big thanks to Senator Cantwell for finding time in her busy schedule to listen to issues concerning our profession.
LDAC is an incredible three days, packed full of social interaction and the exchange of professional experiences. It is also a candid illustration that – in spite of our innate ability to analyze facts, appraisers do have personalities – some very big and boisterous personalities – and we are a proud community working to extend the AI mission of instilling the public trust through the quality of our work and the integrity of our practices. Thanks LDAC – what an experience!
Seattle Chapter Hosts AI President
by John Gordon, MAI, AI-GRS
Appraisal Institute President Scott Robinson, MAI, SRA, AI-GRS paid a visit to the Seattle Chapter on April 20. Scott attended the Board meeting, answered questions during the Candidate Forum, and was the featured speaker at dinner.
Scott’s address covered a wide range of topics. He first discussed the state of the valuation profession. There are an estimated 76,800 licensed or certified appraisers in the U.S., 29% of whom have earned a professional designation (MAI, SRA, ASA, etc.). There are about 52,200 residential appraisers and 24,600 commercial appraisers.
As of February 2016, the Institute had 19,608 members, about 12,000 of whom hold designations. Appraisal Institute members account for roughly 50% of all commercial appraisers, 10% of all residential appraisers, and about half of all designated appraisers.
Nationally, the pool of appraisers has shrunk by about 3% in each of the past seven years. With an average age above 60, many appraisers are retiring or moving to other careers, and the number of those entering the profession has failed to keep up. The Institute is fighting hard against this trend: during 2015, we welcomed 900 new candidates and affiliates, and awarded over 800 designations.
Scott spoke of recent advancements in AI education, particularly the popular Capstone program. He noted that an online version of the 7-hour USPAP course would be available soon, and highlighted several new courses on green valuation. He also mentioned industry and university partnerships that are advancing this cutting edge aspect of our profession.
In addressing the future of the valuation profession, Scott emphasized current efforts to attract and retain a new generation of appraisers. The national office has developed an array of promotional materials, both print and video, and the Institute is working closely with a dozen universities that offer advanced degrees in real estate.
Finally, Scott encouraged us all to embrace new technology. The process of developing and reporting an appraisal is becoming more efficient and streamlined, and there are many Institute courses and publications that can help us work our way up and over the learning curve.
Scott closed with a plug for AI Connect, an annual gathering that combines the national meeting with a series of education offerings. This year’s event will take place in July in Charlotte, North Carolina.
Food For Thought
During 2016, we have introduced a new feature at our Chapter dinner meetings. “Food for Thought” is an opportunity to learn about a complex issue involving valuation and public policy. Here is the handout from our dinner in April:
The term “de minimis” can be traced to the Latin phrase “de minimis non curat lex” (the law does not concern itself with trifles). In the world of finance and valuation, it refers to the loan amount below which a federally insured institution is not required to obtain an appraisal, but instead can rely on an in-house evaluation. De minimis levels were established in 1989 as part of the Financial Institutions Reform, Recovery, and Enforcement Act. The initial de minimis level was $50,000. Since 1994, the de minimis for residential lending has been $250,000.
In early 2015, the U.S. Senate Committee on Banking, Housing, and Urban Affairs began consideration of a proposed increase in the de minimis. Those supporting the change argue that the appraisal process can extend the time necessary to close a loan, which may compromise a closing. They claim that many rural areas are experiencing a shortage of qualified appraisers. Finally, they emphasize that the cost of the appraisal ultimately is borne by the borrower, increasing the effective home price.
Opposition to an increase in the de minimis has come from the Appraisal Institute, from other appraiser organizations, and from some review appraisers within the banks themselves. They maintain that an appraisal is the last line of defense against irresponsible lending. They point out that appraisers may be prohibited from participating in evaluations that are not USPAP compliant. Finally, they question the assertion of that there is a shortage of competent appraisers, maintaining that any such shortage could soon be alleviated by paying higher appraisal fees.
Should Congress allow any de minimis level for residential lending?
If so, what would be the appropriate level?
Are there circumstances where an in-house evaluation completed by the lender might provide sufficient support for a loan?
Who can perform an evaluation? What professional qualifications are required?
What standards apply if an evaluation is performed by an appraiser? By a non-appraiser?
Is there a shortage of qualified residential appraisers? If so, how might this shortage be alleviated in the short term? In the long term?
Olen Miller, SRA, AI-RRS
Olen started his formal working career with Harrah’s Casino as a craps dealer in Lake Tahoe in 1993 and soon transferred with the company to open a new riverboat casino in North Kansas City. After Harrah’s announcement its partnership with the Skagit Tribe to open a casino in Bow, WA, he interviewed and was promoted to a casino supervisor for the property. While at Harrah’s Olen assisted management with table games training and became a certified corporate trainer/facilitator for the company.
In 2002, Olen started his apprenticeship as a residential appraiser with Kent Thomas at the Muljat Group and was eventually licensed in 2005. He has served for ACOW in the capacity of vice president and North Sound regional representative until May of 2013 at which time he went to work at Fannie Mae in Dallas as a contract Forensic Review Appraiser. After his contract ended he returned to the Pacific Northwest in May 2014 to open his appraisal practice and take advantage exceptional recreational opportunities and high-quality of life that Bellingham offers. Olen is an avid outdoorsman and strives to be out in the back county 60 days a year- whether it’s skiing at Mount Baker, sailing in the San Juan’s or hiking and climbing in the Cascades.
Olen joined the Appraisal Institute in 2002, became a designated SRA member in January 2015 and completed his review designation in December of last year. He currently serves as the North Sound Chapter chair 2016.
Norma Miner, MAI
Norma Miner began her commercial appraisal career soon after receiving her MBA from the University of Washington. She trained under Gary Chamberlin in the Tri-Cities, prior to returning to the Seattle area, where she worked for Kidder Matthews as well as Colliers. In 2002 she started NLM Valuations and has worked with many appraisers, primarily in the Eastern Washington market. While she has focused her “geographic specialization” in the Tri-Cities, she continues to expand her practice in the Western Washington market.
Michael L. Lamb, MAI, SRA, AI-GRS, AI-RRS
At the April AI Dinner, Michael L. Lamb was awarded the AI-RRS designation for residential review. The designation is Michael’s last of the four designations offered by the Appraisal Institute. Michael first received his SRA designation in 2007 after beginning his career as a residential appraiser. In 2008 Michael changed paths and expanded his career into commercial appraisal, receiving his MAI designation in July 2013. The AI-GRS followed in August 2014. Michael is a review appraiser with HomeStreet Bank. Although he works primarily in commercial real estate valuation, Michael’s work often crosses over to subdivision review, leveraging the value of the AI-RRS.
Briana Hirschi, SRA, AI-RRS
Briana Hirschi is co-owner of High Quality Appraisals, Inc., a small fee appraisal firm specializing in residential appraisal and serving the greater Seattle area. She began her appraisal career in California in 1990, specializing in commercial property originally. She moved to Washington in 1995 and has really enjoyed learning about different market areas and a wide variety of property types. Now, with her new designations, she is hoping to be engaged in more assignments revolving around legal cases, performing appraisals and/or acting in a consulting capacity.
Mary Campos, MAI, SRA, AI-GRS, AI-RRS
Mary Campos has been appraising close to 30 years, originally as a residential appraiser and eventually as a commercial appraisal. She earned her SRA designation in 2006 and the AI-RRS designation in late 2015. In early 2016, after a couple of years of working toward the commercial designations finally resulted in being awarded the MAI and the AI-GRS. Service to the Seattle Chapter started as volunteering for hospitality, serving as Education Chair, being responsible for putting together the All Day Residential Seminar, the Emerging Marijuana Seminar and residential sessions of the Fall Conference. She served as Residential Liaison and as a board of director before starting the officer chairs eventually resulting in Chapter President in 2014. From 2010 to 2011 she served as Region 1’s member to the Leadership Development and Training Committee and then served as Region 1’s Education Liaison from 2012-2013. In 2016 she started serving as Region 1’s Third Director to the National Board of Directors and will eventually move up to Region Chair. She has attended LDAC in 2012, 2014 and in 2016. She spent most of her career working with her husband and best friend Marc Campos, MAI, SRA until 2010 when she went to work for Union Bank as a Residential Regional Reviewer. Thinking she was missing out on life, she re-entered the fee-world in late 2013, however in 2014 was lured back to the steady life of a reviewer and now works for HomeStreet Bank as a Commercial Reviewer. Despite her involvement with AI, her real inspiration is her family, her two children, their spouses and four grandchildren. Last year Marc and Mary took in Marc’s parents so they could be more available to them, which has kept them busier than ever. Life is Good, especially now that she’s passed the Comp Exam!!
When she gets the chance she loves to travel, go antiquing with friends, cook for family, tend to her garden but mostly play with those grandkids.
John Gordon, MAI, AI-GRS
John Gordon is a senior appraiser with Kidder Mathews, specializing in lodging and senior living. He began his career in 1984, and was awarded his MAI designation in 1989. With his AI-GRS now in hand, he hopes one day to combine the roles of reviewer and retiree.
Matthew Sloan, MAI
Matt has been working in the appraisal industry since early 2000, receiving his general commercial license in 2003. Since that time he has worked on a wide variety of assignments, largely for public agencies, from acquisition planning and appraisal project management to residential, commercial and industrial appraisal assignments, with a focus on easements, partial acquisitions, special benefits and remainder damages. He has a long history working with Sound Transit on a wide variety of projects, as well as a large number of other municipal projects requiring right-of-way acquisitions. He has also worked on numerous special benefit studies and Local Improvement Districts (LID) for street improvements, utilities, parks and open space and public transportation enhancements such as bus rapid transit and streetcars. Prior to beginning his appraisal career, Matt worked with a construction management firm and spent six years in the US Navy. When not busy appraising, Matt is normally planning his next dive trip.
Region 1 Meeting
by Barrett Keitges, MAI
Representatives and staff members for the Appraisal Institute chapters that makeup Region 1 met in Portland, OR April 29th and 30th. As an Alternate Regional Representative for the Seattle Chapter, it was my first time attending a meeting outside of the Puget Sound Region and it was a fascinating experience. I had the opportunity to speak with representatives of many of the diverse chapters that make up Region 1 (ranging from Alaska to Northern California) in addition to representatives of the national office, including Appraisal Institute Vice President Jim Murrett, MAI, SRA. The broad range in appraisal expertise represented at the meetings was impressive and socializing with these appraisers, some of whom have vastly different specializations, was a lot of fun.
The Region 1 Meeting was held on the 30th and was attended by 30 representatives and staff members including six members of the Seattle Chapter. Highlights included a presentation by the new Director of Marketing, Roberta Borst (one of the minds behind the Allstate “Mayhem” commercials), on Appraisal Institute Marketing efforts; a presentation by Appraisal Institute Vice President Jim Murrett, MAI, SRA on the State of the Appraisal Institute (should be very familiar to chapter members that attended the April 20th Dinner Meeting); and roundtable discussions on the topics of University Relations, Developing Residential Membership, and Education. Many of the challenges that the organization and individual appraisers have faced in recent years were topics woven into the roundtable discussions and presentations throughout the meeting. As far as we are from Washington D.C. here in the Northwest, I found discussions and experiences shared about interactions between the Appraisal Institute and various government agencies particularly interesting.
The upcoming National Meeting in Charlotte, NC was top of mind and members from the Region 1 chapter were encouraged to attend.
Region 1 Education Meeting
by Kathy Walsh, SRA
The regional chapter meeting was held in Portland April 30. Prior to the meeting, April 29, education representatives from each of the chapters participated in a discussion regarding their education schedules and the challenges associated with providing live classes.
With the popularity of online and synchronous course offerings, chapters are seeing less and less interest in live classes, particularly with residential appraisers. The chapters felt they need a way to reach out to their members for them to remain active, as region wide, the education schedule is smaller than in past years due to the reduced demand. Residential appraisers in particular are interested in topics that include practical information that they can “use tomorrow”. The answer seems to be in offering “home grown” classes that don’t compete with the national offerings. There was great interest in our Fall Conference which draws about 250 people as well as our All Day, All Residential program. There is one other chapter in California which offers a similar Residential Symposium but the Seattle chapter is the innovator when it comes to directly reaching out to residential appraisers. There was also great interest in our Residential Roundtables. No other chapter offers a similar program. These informal sessions are proving to be very popular. The meetings are scheduled in various locations in order to reach out to as many appraisers as possible. The sessions are free and are a great way to introduce and promote the Appraisal Institute. They also provide an opportunity for some lively, in-person discussions and networking with peers.
Other recommendations included producing live/synchronous classes that could be held simultaneously at various locations and offering timely classes that coincide with “hot topics” as well members’ education cycles.
10th Annual Fall Real Estate Conference 10/18
Join us October 18, 2016 at the Washington State Convention Center in Seattle for our 10th Annual Fall Real Estate Conference. Choose 4 from multiple sessions covering residential, commercial, legal, and other topics, enjoy tasty meals and a post-conference networking reception.
If you or your company are interested in sponsoring this great event, please contact Jim Walker at (206) 605-3405.
Become a Friend of the Conference!
In 2007 the Seattle Chapter sponsored the first Fall Real Estate Conference. Fast forward to 2016, it is hard to believe that on October 18, we will be having the TENTH annual Fall Conference. It has become the Chapter’s mainstay event in the region for networking and real estate information/knowledge. It also helps support our commitment to offering the best real estate appraisal education available.
But, we need your help! By becoming a Friend of the Conference through a contribution of $100 or more, you will gain recognition as a supporter of our biggest event of the year. Your name will be visible on the chapter website and you will also be recognized at the Conference itself.
Thank you for your support, and we’ll see you at the conference, October 18!
Thank You to Our Fall Conference Sponsors!
Big thanks to the companies that have already shown their support for this great event. If you or your company are interested in sponsoring this year, please contact Jim Walker at (206) 605-3405.
FRIENDS OF THE CONFERENCE
David Beck, MAI, AI-GRS
Patrick Lamb, MAI
Jim Walker & Elly Snow
AI Education Trust Scholarship Opportunities
Are you a Candidate trying to meet you deadlines but may need assistance? The Appraisal Institute Education Trust offers options to Candidates for Designation to assist them in completing their education deadlines. Upcoming scholarship deadlines:
Appraisal Institute Education Trust AI Course Scholarship
Appraisal Institute Education Trust Minorities and Women AI Course Scholarship
Appraisal Institute Education Trust Candidate for Designation Scholarship (Note: While the other scholarships only pay for one course, this scholarship pays for ALL advanced-level education needed for Candidacy. )
Candidates are eligible to receive one scholarship per calendar year. Please note: It is recommended that, prior to submitting a scholarship application, applicants attend a minimum of two Appraisal Institute chapter meetings annually.
This event is for Designated members and/or PhD’s who currently are not approved to teach for the Appraisal Institute but are interested in completing the process to become a full instructor for AI programs. Completion of program does not guarantee approval to teach.
Only a few seats remain! If you’re interested, be sure to register soon!
CHICAGO (May 20, 2016) – The nation’s largest professional association of real estate appraisers today announced a three-year strategic plan to address challenges and opportunities facing the organization and the real estate valuation profession.
The Appraisal Institute’s strategic plan outlines the organization’s core values, objectives and strategies from July 2016 through June 2019. The Appraisal Institute Board of Directors approved the plan during its May 5-6 meeting in Chicago.
“Implementing this strategic plan will help the Appraisal Institute to maintain its leadership role in the real estate valuation profession,” said Appraisal Institute President Scott Robinson, MAI, SRA, AI-GRS. “The plan provides a path to continued success for the Appraisal Institute and its professionals.”
The strategic plan includes five core values governing the Appraisal Institute’s continued growth and development:
Distinctiveness: Elevate the Appraisal Institute and its members within the valuation profession by virtue of designations, education and body of knowledge.
Innovation: Continue to be thought leaders by promoting innovation and addressing current developments within the valuation profession via education, information resources, benefits and setting standards for the profession.
Professional Responsibility: Encourage and support the highest level of ethical and professional behavior of all Appraisal Institute professionals.
Advocacy: Represent the interest of the appraisal industry and work toward advancement of Appraisal Institute professionals within it.
Leadership: Advance the interest of AI professionals, the real estate valuation profession and the public with integrity and excellence.
The strategic plan also includes four objectives, each with its own strategies:
Operate in ways that valuation professionals recognize as important and that encourage their ongoing affiliation with the Appraisal Institute.
Structure Appraisal Institute governance to enhance responsiveness to market and members’ needs, and to operate in an efficient, effective and fiscally-responsible manner.
Minimize attrition among current (U.S.) Appraisal Institute professionals.
Enhance the value of membership, candidacy and affiliation; by doing so, instill greater loyalty to and a stronger bond with the Appraisal Institute.
Promote public policies that reduce regulatory burdens, protect the public, improve client interactions and foster a vibrant business climate for valuation professionals.
Continue as the recognized leader of the real property valuation profession, including credentialing, ethics and standards, advocacy, the development and delivery of education, and the timely creation of quality programs and publications.
Advance awareness and relevance of the Appraisal Institute, its designations and its professional members.
Expand Appraisal Institute education and publication delivery.
Investigate and develop new business models that are consistent with organizational goals.
Enhance thought leadership programs that promote innovation and address technology developments in valuation.
Operate efficiently to ensure Appraisal Institute’s financial stability.
Identify and implement technologies that streamline and enhance services to Appraisal Institute professionals.
Develop and market products and services that expand Appraisal Institute revenue opportunities.
Advance the Appraisal Institute as the leading international source of real property valuation knowledge.
Prioritize Appraisal Institute international activities that make the most efficient use of resources.
Grow Appraisal Institute brand to reinforce the Appraisal Institute as the globally-recognized holder of the real property body of knowledge.
Expand delivery of Appraisal Institute’s education and publications.
Maintain and, to the extent possible, grow Appraisal Institute Designated Members, Candidates and Affiliates in international locations.
The Appraisal Institute’s Strategic Planning Committee developed the plan for the AI Board of Directors’ review and eventual approval.
AI Announces Nominee for 2017 Vice President
Stephen S. Wagner, MAI, SRA, AI-GRS, of West Lafayette, Indiana, was nominated for 2017 Appraisal Institute vice president by the AI National Nominating Committee at its May 4 meeting in Chicago.
National Nominating Committee Chair M. Lance Coyle, MAI, SRA, announced the committee’s decision to the AI Board of Directors at its May 5-6 meeting in Chicago. Board members may file petitions for additional nominees until mid-June.