With foreclosed properties and short sales accounting for nearly half of the single-family residence transactions in Jackson County, appraisers are finding it difficult to determine the value of nondistressed properties.

With foreclosed properties and short sales accounting for nearly half of the single-family residence transactions in Jackson County, appraisers are finding it difficult to determine the value of nondistressed properties.

The more repossessed homes that banks unload, the more downward pressure occurs on prices for all homes in the market.

"If you have a regular house that hasn't been foreclosed and the people are trying to sell, we have to take into consideration the whole neighborhood," said Jacksonville residential appraiser Patricia Cunningham. "If there are two or three foreclosures in that neighborhood we have to look at those foreclosures ... ."

The problem is exacerbated by a new law that blocks appraisers from talking to lenders and by guidelines that narrow the geographic area and time frame in which appraisers could search for comparable sales.

"They want the comps (home value comparisons) to be within a mile and within 30 days, which is hardly do-able," Cunningham said.

With lenders prone to reject comps from homes beyond the one-mile range, appraisers have to compile additional evidence to make their cases, especially in outlying areas.

So Cunningham, like appraisers across the country, finds herself adding notes upon notes.

"Sometimes you go a little farther and if you're in a rural area you could go 16 to 18 miles," Cunningham said. "I give them plenty of explanation in the addendum and they have to take it. I'm giving them total disclosure of what's out there."

She said there are some encouraging signs, with areas that took big dips in value, such as Eagle Point and Central Point, becoming more stable.

While home buyers had to enter sales agreements for federal tax credits by April 30, the closing date for those transactions is June 30. That has created plenty of work for appraisers — at least in the short term. That's expected to slow soon — the Mortgage Bankers Association's index of applications for loans to buy homes has fallen to its lowest level since April 1997.

Nonetheless, investors are still stalking foreclosures, looking for bargain-basement prices. That could lead to still-lower values, unless other elements of the market see greater activity.

Roy Wright of Roy Wright Appraisal Service said lenders and real estate agents would like to ignore the distressed sales.

"But they are a major part of the current market and can't be ignored," he said.

It points to the fragility of the market, Wright said.

"And it is not getting any better. In Ashland, even the number of home sales have decreased over last year."

Reach reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com.