Custom home builders struggle with falling appraisals – Nashville Business Journal:

Buyers simply aren’t willing to pay dollar for dollar what a home is pushing home prices below the actual says Murray Huberof . Yet buyers stil want all of the amenities ofa custom-built home. “Buyers want everything along with lower thanlow prices,” Hubedr says. Huber spoke Tuesday to the Custom Builders Councill of the ata lunch-time meetingh in Brentwood. It was the third part of a speaker’s serie s organized by council president Chrids Parker and aimed at the confusion swirlinhg around the troubled housing In February, Parker invited a panekl of bankers to speak to the builders, followef by a discussion with real estatw agents in April.
Parkerd is worried that lower appraisal values are forcingy otherwise stable builders to closd their doors because they cannot make enough money to supportrtheir businesses. He would not name specific but said some homes are fetching upto $1 millio less than they cost to “We cannot build for those prices,” Parkedr said. When homes are appraised for less than theidrreplacement value, it brings down prices across the entirde housing market. And when homeowners want to selltheir homes, they will be offerede less than they are worth.
Parker said that the new processe of hiring an appraiser under the Home Valuatiom Code of Conduct passed May 1 is for builders because appraisers are randomlt selected froma pool. This was done to increaswe appraiser independence, but Parker said an appraiser draw n at random may not have the experiencd in a certain market to obtain anaccurate value. Hubert said that while this isa concern, appraiserw are not supposed to evaluats homes outside of their market area. Talkintg with appraisers about their qualifications and sharingf specifics on the home with them could help solvethis problem, he said.
“I don’t envy your positiona because you’re in the middle,” Huber told “Communication is important for all of us to getthrougyh this.”
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