From a small northwestern observatory…

Finance and economics generally focused on real estate

Archive for August 2010

wow!

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I hate to brag (not really… but I needed to say that…)

I JUST got the word that my paper, “Appraisal Error Terms and Confidence Intervals” won the “Best Appraisal Paper” award at the 2010 American Real Estate Society conference. The award — which includes a non-trivial cash prize, as well — is sponsored by the Appraisal Institute.

Thanks to everyone here at Greenfield who contributed to this paper. I’ll soon post a copy to our web site.

Written by johnkilpatrick

August 23, 2010 at 11:09 am

Posted in Real Estate, Valuation

Two new videos

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I’ll be the first to admit that I have a “face for radio”, but the good folks at LexisNexis posted a pair of videos of me from the big June “Gulf Oil Spill Litigation Conference” held in Atlanta:

Remediation after the oil spill

Bank losses after the oil spill

Enjoy!

Written by johnkilpatrick

August 22, 2010 at 3:21 pm

Posted in Economy, Real Estate, Valuation

Tagged with

gulfspillvaluations.com

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We’ve been hinting at this for weeks….

www.gulfspillvaluations.com is finally alive! This is our web-based solution to providing valuations for thousands of Gulf Coast homeowners who need documentation for their property value diminution claims resulting from the Gulf Oil Spill.

The “official” announcement hit today. CNBC had a great piece on it (click here for a link) and there are already several great pieces about it on the web.

I’ll keep you posted as this progresses.

Written by johnkilpatrick

August 17, 2010 at 7:07 pm

Posted in Real Estate, Valuation

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Collateral Risk Network

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Great talk Wednesday at the Collateral Risk Network conference in DC. One-hundred or so in attendance, representing a great cross-section of stakeholders in mortgage collateral valuation, including some very senior folks from most of the Federal regulators. I spoke for an hour on the impacts of the Gulf Oil Spill on loan portfolios (current and future) in the affected region.

The news, by the way, isn’t very good. For starters, the property value losses are in the billions. While much of this will be compensable to the property owners, little is being done to the holders of the mortgages (banks, mostly). For example, assume a waterfront property in Louisiana valued at $500,000 before the oil spill. Today, it’s worth half that — $250,000. The property owner turns in a claim (which may be paid, or more likely at that level will need to be litigated). Even if the claim is paid, the property is still worth only $250,000. Now, what if before the spill event, the owner had taken out an 80% loan — $400,000. The bank is now sitting on a $400,000 loan collateralized by a $250,000 property.

In most circumstances, the property owners will continue to make payments, and the loans will be paid in full. However, if history tells us anything, a significant number of these loans will end up badly.

In the immediate, the lenders in the area are basically frozen. Anecdotal evidence coming in from the region indicates lenders are not lending, and even existing loan commitments are being cancelled. This has wide-ranging economic problems, not just for borrowers and lenders, but secondarily for a whole host of market participants (builders and brokers near the top of that list).

On that theme, I’m headed for Louisiana in a few days, with meeting scheduled on a variety of issues (some of them, oil spill related). As usual, I’ll keep you all posted.

Written by johnkilpatrick

August 6, 2010 at 4:36 pm

Posted in Economy, Real Estate, Valuation

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