Category Archives: Uncategorized

Mortgage debt hits new high

Posted on November 19, 2019 | Leave a comment

Mortgage debt has increased to $9.44 trillion according to the latest Quarterly Report on Household Debt and Credit from the New York Federal Reserve. Household debt in total increased by $92 billion (0.7%) to $13.95 trillion in Q3 2019. This is the 21st consecutive quarter with an increase, and the total is now $1.3 trillion higher, in nominal terms, than the previous peak of $12.68 trillion in the third quarter of 2008.

Mortgage balances—the largest component of household debt—rose by $31 billion in the third quarter to $9.44 trillion. Balances on home equity lines of credit (HELOC), which have been declining since 2009, fell by $3 billion this quarter, bringing the aggregate outstanding balance to $396 billion.

“New credit extensions were strong in the third quarter of 2019, with auto loan originations reaching near-record highs and mortgage originations increasing significantly year-over-year,” said Donghoon Lee, research officer at the New York Fed. “The data suggest that households are taking advantage of a low-interest rate environment to secure credit.”

Credit standards tightened slightly in the third quarter of 2019, with the median credit score of newly originating mortgage borrowers rising to 765, a 6-point increase from the previous quarter.

The New York Fed also notes that flows into delinquency among mortgage loans were mostly unchanged from the previous quarter, and foreclosures remain very low by historical standards. Approximately 65,000 individuals had a new foreclosure notation added to their credit reports between July 1- September 30, 2019. As of June 2018, CoreLogic notes that the national share of mortgages that were in some stage of delinquency was 4% in June 2019—a 0.3 percentage point decline, compared to last year’s 4.3%.

The share of mortgages that are delinquent more than 90 days fell from 1.2% to 0.9%, and the percentage of mortgages that were more than 120 days delinquent dropped to 1% from 1.4% in June 2018.

read at: https://dsnews.com/daily-dose/11-14-2019/mortgage-debt-hits-new-highs

San Diego annual home price gains up as of July

Posted on September 25, 2019 | Leave a comment

Home prices were up 2 percent annually in the San Diego metropolitan area as of July, said the S&P CoreLogic Case-Shiller Indices released Tuesday.

The increase was a slight turn of fortunes for the market, which has had annual gains of around 1 percent since January. Still, it is a far cry from the heyday of price increases the last couple of years. In July 2018, San Diego home prices were up 6.2 percent in a year.

Home price gains have slowed nationwide, up 3.2 percent in a year, with experts pointing to affordability issues as the main culprit. The most expensive markets have the most slothful gains, and Seattle has seen prices decline 0.6 percent.

Among California metro areas, San Diego had the biggest annual gains. San Francisco prices were up 0.2 percent in a year, and Los Angeles up 1.1 percent.

Some of the markets hit hardest by the Great Recession are now seeing the biggest boosts. Phoenix metro area gains were up 5.8 percent, followed by Las Vegas at 4.7 percent and San Francisco at 0.2 percent.

disclaimer: for information and entertainment purposes only

Getting your home appraised with PV Solar system – what info to give the appraiser

Posted on September 3, 2019 | Leave a comment

Solar PV valuation is a complex appraisal assignment. This article addresses only the very entry level topic of gathering the accurate characteristics of the system and how it is installed. Grow your business by taking a class to hone your skills on valuing these systems. Most appraisers find it takes more than a 4-hour class to learn the basics of valuing solar PV. You’ll find a Field Guide to Solar Energy on my website that will list resources useful to real estate professionals.

Info to give to the appraiser:

Ownership status – Is it leased? A Power Purchase Agreement? Owned, but financed with a Uniform Commercial Code (UCC) Filing? Is it owned with no financing?

If the system is leased, a power purchase agreement, or owned but financed with a UCC filing, the system is personal property and not a fixture or part of the real estate. Don’t forget to obtain the lease or power purchase agreement terms and analyze them to opine on the effect on the real estate value.

Size of System – The size of each array or grouping of panels must be identified. Simply counting the panels will not give the system size because panels vary in wattage.
Age of System – The age of the system is important because as the panels age, the energy production will decrease each year. The reduction is small, but it will affect the energy production over the life of the system.
Manufacturer of the panels – Just like any other product, quality panels have higher production than lesser quality panels. Searching the website of the manufacturer or installation paperwork will give you the quality rating and loss factor.
Tilt and Azimuth – Solar installers will survey the location of the solar system and try to install them for maximum production. That means the tilt or vertical angle of the panels and the Azimuth or compass direction the system faces are important factors in maximizing the efficiency of the system.
Inverter type and size – The inverter converts the direct current (DC) produced into alternating current (AC) used by our buildings and the grid. Some systems have micro inverters on the back of each panel that operate that panel only while other systems have a central inverter that converts all energy produced from DC power to AC power.

It is important to know the size in wattage of the inverter(s), age, manufacturer, and warranty term. Most inverters will need to be replaced before the solar PV system warranty term. You’ll need to consider replacing the inverter(s) within the cash flow analysis to valuing the system using the income approach.

Mount type – Are they fixed or tracking? Do the panels stay in one position or do they move with the sun?
Monitoring System – Is the system connected to a monitoring software that will provide production history, size, age, and graphics of each array? If so, this can be extremely valuable in collecting the characteristics identified here.

The best guide to gathering the details needed for valuing a solar system is the Appraisal Institute’s Residential or Commercial Green and Energy Efficient Addendum. One page has the list of characteristics needed to develop a cost or income approach to valuing the system. These inputs make using a software, PV Value® or Ei Value®, much smoother. PV Value® is used in the Appraisal Institute’s two-day course, “Residential and Commercial Valuation of Solar.”