Baltimore City appraising is one of the harder appraising assignments an Appraiser can take on.

Baltimore is said to be one of the most "block to block" cities in the country, possibly second only to Philadelphia. That means subtle and dramatic differences in values can exist from one block to the next. In fact, if you know Baltimore well, you know it means that on any given block, a side or portion of the block may command $50k to 200k premiums from different from neighbors that are just a few steps away.

One of the worst things that an out of town appraiser can do is take on a Baltimore City Appraisal without fully respecting the damage they can do to borrowers as well as themselves and their reputation if they presume their general appraising skills are up to snuff for Baltimore City appraising. Within that context, one of the most difficult challenges an Appraiser can take on in Baltimore City is a higher end Ridgley's Delight Appraisal.

After starting my rehabbing career in Federal Hill in the 1998 time frame I spent 2 years riding my bicycle around dozens of neighborhoods looking for a location I could settle on for my "forever homes".

When I found the 600 Block of S. Paca St. in Ridgley's Delight, it stood out to me. When I found two homes side by side that I could make my own, I was confident I had found the perfect location for me. That was in the 2001 time frame.

It's now 2021. To my shock and that of most people that know my properties and the other Gems buried in this Great Old Neighborhood, our properties have not increased in value as much as they should have. The problem has very little to do with location, as our location is one of the best kept secrets in Baltimore.

In fact, it has a lot to do with the use of archaic appraisal rules which have prevented proper appraising of unique properties with custom features in Ridgley's Delight for a very, very long time.

Most have no clue there are almost 20 loft style homes in Ridgley's Delight that have come online since 2000 and they represent 90% of the top sales in the neighborhood. Some were developed by those who then occupied them. Others were only sold once. Once you get a glimpse at the 20 year history, you'll realize why an appraiser from out of town looks like a blind man when he decided to devalue a property he had no business appraising to start with...

The exciting thing about 551 S. Paca St is that it has shown gutsy rehabbers that a full renovation on an older home on the South Side of South Paca Street can command HUGE dollars in relative terms, and it should help remove the appraiser road block we've all had to navigate around for 20 years when wanting to create fantastic homes in the southern part of this really great neighborhood.

As the downtown area started to take off, the homes were too expensive due to partial upgrades to qualify for full gut rehabs without the risk of over building. This is generally why there are still few rockstar quality rehabs found in Ridgley's Delight at this time. It's not due to a lack of location or potential but in fact it's due to a location that was so good, it attracted early rehabbers and renovaters and those cycles then take time to work themselves out.

The Appraiser and Underwriter try to use "circles" to define market areas. What happens when the market area is so small with such diversity that a circle never works properly? Meet Ridgley's Delight and the Curse of the Appraiser's Circle.

Let's pretend we are doing an appraisal on 627 S. Paca St, and let's pretend an appraiser wants to use a 0.30 circle to try to define a market area.

What happens when they draw that circle?

To the shock of underwriters and others not familiar with Ridgley's Delight and Baltimore, only 1/6 of that circle is related to Ridgely's Delight, 1/4 of that circle contains properties across Martin Luther King Blvd that generally are $50k-100k less in value if true comps with similar size and shape can be identified at all. That leaves over 50% of the circle without residential properties for consideration at all. And it gets worse for the naïve appraiser...

As it turns out, every true local knows that Ridgley's Delight is actually 2 neighborhoods in one with dramatically different parking densities, home sizes and home values as a result...

The table below shows the high sales in the neighborhood between January 2020 and May 2021. Due to the tiny size of the neighborhood it's really rare to have one or more high priced comps anytime a higher valued home goes up for sale.

During a current refinance on one of my properties, I had an out of town appraiser try to claim a nearly prefect comp for my needs at 625 S. Paca St was an "outlier". Can you imagine my surprise when I had to spend hours documenting the fact that Ridgley's Delight has had more than it's fair share of home sales over $350k, they just don't all show up at once given it's such a small area and those of us that gain hold of a special home in this area don't tend to give them up frequently...

Would it surprise you if I told you that 90% of all the top selling homes in Ridgley's Delight were industrial loft style properties or inspired by them? I can think of at least one DC appraiser who should be feeling a bit shocked about now. Who knows. Maybe there's a few more in the mix too...

With all due respect.
688 Washington Blvd looks like a super home.
Someone put a lot of work and energy into it to make it the most it could be given it's limited width and on a reasonable budget. That said, for any appraiser to claim it's only worth $20k less than 627 S. Paca St is farcical...

• He declared the $449k sale at 625 S. Paca St was an "outlier , while totally omitting the existence of 551 S. Paca St from his appraisal. If an Underwriter asked him why it was missing, I guess it would have been called an "outlier" too?

  • He ignored suggestions related to using for using homes on the East Side of Camden Yards for primary comps or part of a bracket with homes from the north side of Ridgley's Delight or those across MLK.

  • He ignored suggestions not to use "above average" row homes from the North side of Ridgely's Delight with no parking or on crowded streets for comps for the higher end homes in South Ridgley's Delight.

  • He ignored suggestions related to using homes across MLK and not adjusting up by $50-100k.

While all that was bad, it got worse.

At some point in his notes, he claimed there wasn't enough listing information to know if Loft Style renovations commanded a premium in my neighborhood...

Regretfully, it didn't stop there...

He found a material fact that should have created a valid concern. Instead of calling me up and asking me about that fact, he proceeded to assume he knew something that was false, and he decided to create a story out of numbers to support a storyline he got into his head that was very far from the truth.

This appraiser I'm referring to took 625 S. Paca St, a nearly perfect compe for 627, and he adjusted it down by $25k. A review of his adjustments seem to show fabricated facts about 625 were used for 17k of the 25k in adjustments. And then it gets worse....

The appraiser decided to peg the value of my home to 688 Washington Blvd. What on earth was he missing?

He most surely seemed to be missing the 20 year history of loft designs in Ridgley's Delight for starters.

I can only presume he felt no one might do a side by side photo gallery for others to judge for themselves...

This appraiser likely spent less than 1 hour on my appraisal. I've spent dozens now un-f---king up his work. I'm not pleased about it at all but he's not the first to try to make a quick buck on an appraisal. The good news? Our community now has a reference to try to help us all avoid these "appraiser issues" for a very long time...

In the image above related to Ridgley's Delight you saw high home sale values in the past 17 months range from 315k to 665k.

Does it make sense then to go across MLK and grab a comp where the highest sales for the same 17 months max out at $335k?

Why would anyone do that?

Occasionally a big home will get sold over there that approaches $400k. that was the case in 2017. If one like that exists that makes sense, take it. But if not, why devalue Ridgley's Delight's cream of the crop as a buy product of the Curse of the Appraiser's Circle? Why would anyone do that?

Worse yet, why would anyone use a 15 year old, non industrial loft style, new construction town home from a lower priced neighborhood as a comp?

That's adding devaluation on top of devaluation?

And this is an exceptional example showing just how utterly and completely broken the Home Appraising System in the US is now .

"Appraisal Management Companies" have turned appraising into a commodity service.

They take huge chunks of money off the top for managing software scheduling and tracking systems. The only thing they care about now is price and promised turn time.

In the prior system, an Appraiser who under-appraised too much would have no clients.

In this system, an unethical Appraiser could be on dozen's of Appraisal Management Company roles, and he or she could just drive around under appraising homes, spending less than an hour per appraisal and making 1000's a day doing it...

If someone wanted to confirm the number of under-appraisals Appraiser X had completed recently, is there a single place that can be checked?

All the good appraisers are leaving the business or going to very part time while only those who want to turn and burn are left. Years and years of training are simply not worth become a work horse for others as near as I can tell...

I don't know the exact disposition of Appraiser X, but I do feel he aggressively sought to discredit my home and it seems he even went out of his way to do so, and what I can assure you of is that appraisal appears to have been done in under 1 hour.

Do you know anyone who likes their life's work to be shit on and devalued by over 25% with a one hour appraisal by someone they've never met?

In the past, higher homes in Ridgley's Delight were always strapped down by a lack of comps. An "aggressive" appraiser seeking to do a good job on a higher end property in Ridgley's delight would take one comp from Ridgley's that was often a far lesser property. Then they would go across MLK and grabe another comp that was even less relevant, further under valuing the property and then they would go to Otterbein or northwest Federal Hill and pull a single comp and make their case for a higher value. Whie this 'bracketing approach' seemed logical to appraisers, the fact of the matter is that 2 of the 3 comps were almost always far inferior to the properties themselves.

It's time for the Appraisers to start waking up to some new rules for Ridgley's Delight. If the homes are large, with parking and well done, quit use the inferior properties and adjusting up. Use Camden Yards as the center of your search area and get one with properly appraising Ridgley's Delight properties as they deserver to be appraised....

QUIT DEVALUING OUR NEIGHBORHOOD WITH ARCHAIC APPRAISAL LOGIC...

Make Camden Yards the Center of the Search and look what happens...

The appraiser used these comps to justify a $449k sales price, and while that makes sense, it also shows the range of values that could have produced a sale a heck of a lot higher...

A lot higher you say? YES a lot higher even... In 2017 625 S. Paca St sold for 423k. The appraiser knew I had priced it low hoping for a competitive bid situation that didn't happen. When she first heard the sale price she was unsure she could get it to appraise. When she walked in the door she was blown away. She delivered a $475k appraisal when only $423k was needed because she KNEW what she was looking at and she KNEW how to assess value in Baltimore City...

I got tired creating cool spaces in Baltimore only to get beat up and down by appraisers using archaic logic and those out to make a quick buck while doing as little work as possible.

After time away now, I only miss it a little.

My largest project is currently on the Market for 800k or so.
This was bought and decorated by a friend over a decade ago.
Do check it out...
https://www.zillow.com/homedetails/2105-Saint-Paul-St-Baltimore-MD-21218/131241557_zpid/

The appraisal will be easy as long as the appraiser limits his/her search to homes with elevators...

West coast project coming up next. The East Coast Appraisers got the best of me.