Ive already seen oil commentary and market condition adjustments in recent commercial appraisals. I suspect appraisals are going to become an increasing deal issue in 2015.
People (investors and home buyers) have been very comfortable investing in Houston RE since about 2011 because property values have steadily increased parallel to job growth (as much as 35% total in some markets near my home). The latest forecasts for 2015 are that the rate of Texas employment growth will come in at about 2-2.5% or about half that of 2014. That alone isn't enough to cause great distress, however, the level of new construction completion for Houston SFR is pretty high with new multi family units likely to be 50% higher than that of 2014 levels. The appraisers know this increased supply with lower job growth could cool the market and increase the risks of value declines in 2015-2016.
After being persecuted for overstating values during the last market peak of 2006-2007, you can be certain that appraisers are paying much closer attention to market trends, forecasts and indications.
Another factor that wasn't in 2007 is the huge amount of institutional investment. Since 2010, a handful of REITs have bought 10s of thousands of Houston area SFR and Multi Family units. This gives control of a major portion of the market to a small group of participants. stock market performance and how REITs react to any changes in the RE market could influence the overall market impact, to a greater or lesser degree.
To mitigate the increased risk, Flippers would do well to confirm ARV by getting actual "as complete" appraisals prior to purchase and landlords should stress test their holdings modeling a 1-2 year period with higher V&C loss, flat rents and extended marketing times to sell properties.
Just my $0.02 from Houston.
