Drones and algorithms replace appraisers
DFW: Deep Ellum is a new hub for Uber, planning to occupy 500,000 square feet of new office space for 3,000 new jobs. Dallas County Commissioners kicked in a $2.6 million abatement. Dallas city government added $9.3 million. The Texas Enterprise Fund raised $24 million — all for a company that has yet to make a profit.
Seattle: After a $7,000 do-it-yourself tiny home sold out within hours, Amazon is now selling a 774-square foot home on its website for $105,000. “The Cliff” is a three bedroom, two bath homemade by Estonian wood structure distributor, Q-haus, and has an open kitchen, dining room and sauna. The home weighs 44,000 pounds, packaged in two modules that can be assembled by “two skilled workers.” Furniture and appliances are also included. After buyers sign a purchase contract, production and shipping takes about three months. Buyers will need to factor in foundation cost, ranging from $4-$7/sf. Building permits for independent structures can vary from state to state.
D.C.: A drone and computer algorithm may appraise your next property. Federal regulators are moving to allow a majority of U.S. homes to be bought and sold without involving licensed appraisers, according to the Wall Street Journal. The value of homes exempt from human evaluation will be raised from $250,000 to $400,000. Proponents of the change say that by not having to hire a licensed appraiser, lenders and homebuyers will save money and transactions can be done faster. Appraisers and consumer groups say it introduces risks in the $10.9 trillion market for home loans and computer technology can’t replicate trained human judgement, sense and experience. The proposal was in November by the Office of the Comptroller of the Currency, The Federal Deposit Insurance Corp., and the Federal Reserve. The FDIC and the OCC have approved the change and the Fed is expected to follow, and the new rules will be effective once it does. More than two-thirds of U.S. homes sell for $400,000 or less, using U.S. Census data and the NAR. Had the new threshold been in force in 2017, about 214,000 home sales, or $68 billion worth, could have been made without an appraisal. Moody’s Investors Service warns that eliminating appraisers heightens risks for investors.
Sacramento: Cities and counties in Southern California must plan for construction of 1.3 million homes in the next decade. State law requires cities and counties to evaluate their zoning measures every eight years for population increases. Southern California Association of Governments had proposed zoning for 430,00 homes. State law says 40% of the new homes must be reserved for lower-income residents. Now local developers are looking at how to divide the 1.3 million new homes among cities and unincorporated areas in Los Angeles, Orange, Imperial, Riverside, San Bernardino and Ventura counties.
LA: The new most expensive home for sale in the U.S. is the 10 acres Chartwell Estate, in the Bel Air neighborhood. Priced at $195 million, it has a main house of 25,000-square feet, 11 bedrooms, 18 baths and a 5,700-square foot guest house. The facade will seem familiar as the Clampetts’ mansion to viewers of the “Beverly Hillbillies” TV show from 1962 to 1971.
Copenhagen: Denmark’s prime minister dismissed U.S. interest in buying Greenland. The U.S. has acquired considerable territory through monetary means. In 1803, the Louisiana Purchase from France added about 828,000-square miles of land that created all or part of 15 states. In 1867, Secretary of State, William Seward, bought Alaska from Russia. During WW1, the U.S. feared Germany might secure the Danish Virgin Islands. The Danes had been trying to get rid of the Caribbean islands since the mid-1800s, when plantations collapsed after a slave revolt. Denmark resisted a deal without provisions for the population, but agreed to sell after President Woodrow Wilson implied the U.S. might occupy the islands. And in 1946, the U.S. offered the country $100 million for Greenland.