As the COVID-19 pandemic heightens in the U.S., more and more local governments have begun to issue stay-at-home orders, which has directly impacted the nation’s real estate industry, as workers encounter restrictions to their typical operations. This has created mounting concerns for appraisers, who are typically required to enter client’s homes. HousingWire filmed an interview with Lundquist Appraisal Company’s founder and owner Ryan Lundquist to gauge how appraisers are navigating this period of uncertainty.
Below you will find two of the five questions HousingWire asked Lundquist, with the full video below.
This interview has been lightly edited for length and clarity.
HW: Without current market sale comps, how do current market conditions affect the appraisal process?
Ryan Lundquist: Here’s the thing, comps are always dated. Say something sold in late March 2020, it doesn’t really tell me about the market in March 2020, it tells me what the market was like when these properties got into contract in February or January. So, we always have this problem in the valuation space where anything that’s sold doesn’t really tell us about right now. It’s like a historical artifact that tells us about the past, and so I would say the most accurate way to get a sense of the market is to look at the listings and what’s getting into contract right now, what is happening with the listings, and what’s happening with the pendings. Appraisers really have to give strong attention to that in order to really get a sense of what is the current market doing. That’s where we will absolutely see the market beginning to change or whether it’s going up or going down.
HW: What are some appraisal alternatives to inspecting a home during this time?
Ryan Lundquist: There are appraisal alternatives. There have always been products like desktop appraisal, where an appraiser does an evaluation without leaving his or her desk and will do the analysis based on information from public records, or maybe information from Realtors on MLS with photos and such. There are also drive-by appraisals, also known as exterior appraisals, which is when an appraiser drives by a property and looks at the outside and relies on information from tax records, making assumptions the square footage is correct and the bed/bath count is correct. They appraise, but it’s just based on more limited information. There’s also a lot of talk about appraisers using a little bit more information with products from Realtors, especially with the virus outbreak. Appraisers are also doing a lot of talking with clients through FaceTime, or the Google duo app and having an owner walk through a home with video, which I think is innovative.
For more filmed interviews from HousingWire, watch this video interview with Finance of America Mortgage’s President Bill Dallas about how lenders can navigate the uncertainties in the mortgage industry amid the COVID-19 pandemic.
Watch the full video interview with Ryan Lundquist below.