Appraisals & Valuations – a Hot Topic in Real Estate Sales
There was a very interesting article on the cover of this week’s real estate section of the New York Times. In brief, appraisals in New York city are often coming in too low because they are being done by appraisers from out of town who don’t know the local, urban markets and tend to undervalue properties; and there are not enough comps to substantiate the prices because there have been so few sales. This is an issue in Hoboken, too. Appraisers unfamiliar with the area may not appreciate the difference in location between Hudson Street and Jackson, or the benefits of a second bath in a two-bedroom apartment.
When an appraisal comes in too low, the buyer can always bring more money to the table – assuming they have the money. It’s ironic that when Hoboken condo prices were rapidly appreciating at the height of the market there was a similar problem. The comps couldn’t keep up with the sales prices. Now a down market has caused appraisals to again be the center of many buyer’s and seller’s attention.