WASHINGTON (National Association of Home Builders) – Twenty-six percent of home builders have seen lost sales as appraisals come in significantly below the contract sales price, according to a study conducted by the National Association of Home Builders (NAHB).
“Home builders are increasingly concerned that inappropriate appraisal practices are needlessly driving down home values. This, in turn, is slowing new home sales, causing more workers to lose their jobs and putting a drag on the economic recovery,” said Joe Robson, NAHB chairman.
According to Robson, construction of 100 single-family homes generates 324 local jobs, $21.1 million in local income and $2.2 million in taxes and other revenue for local governments in the first year.
Of the builders surveyed, 60 percent claim that inadequate appraisals are creating major problems in the market. Fifty-four percent of those reporting appraisal problems saw appraisal amounts less than the cost to build.
Robson blames the surge of faulty appraisals partly on foreclosure and distressed sales.