Category Archives: Mann Overboard

After a 2-year hiatus, the Mann Overboard blog is back. This blog will cover anything and everything that comes to mind. There will be market forecasts. Suggestions regarding interesting web sites, books, or topics I think readers should check out. My continual diatribe on the real estate appraisal industry and all of its wrongs. My support for a new real property valuation profession, adopting Mortgage Lending Value in America, creating Real Property Risk Ratings in America, and introducing readers to the concept of Socionomics. Other topics will surely arise.

Feedback will be limited to approved site visitors. This is not to limit disagreement – different ideas are needed for us to advance any concept we discuss. I just want to keep the content professional. Replies whining about old subjects like AMCs and what banks have done to the industry and such don’t get us anywhere. And simpl


MARCH 12, 2023 – Worldwide Carbon Dioxide emissions hit another record high in 2022. Plants, and the people and animals that eat them, gave thanks to all of us that do our part to increase Carbon Dioxide emissions.
In the article (link below) it is laughable that the world needs to reduce emissions by 40% by 2030. With it increasing every year, I would bet emissions will be HIGHER in 2030 than 2022. All of the efforts to reduce emissions, ESG bull*&*(, etc. have failed. They will continue to fail.

It is time for these people to simply admit it is too late to save the planet (in their eyes). Stop creating programs that simply increase costs for the poor while the rich make money off of them. As they say, follow the money. The masses are being used under the false guise of saving this planet.
For those that are Chirstian, Jewish, or Muslim, you already know how the story ends. Humans are on this planet (sorry, Musk, we won’t be living on Mars in the end) until the end of existence. The planet obviously takes care of itself and humans do not get wiped out by warmer temperatures in the future.
The best way to deal with a climate change hoaxer is to just tell him/her that it is too late. Tell them to get over it. Find another hoax to waste their time on.
Viva La Petro!
The Mann


FEBRUARY 24, 2023 – Mr. Bagott was kind of enough to give me permission to post his article to my blog. I could not say it any better than he has. The studies continue to pile up that PROVE there is no bias (systemic or otherwise) in the real estate appraisal industry. Of course, the Fake News Media and racist organizations put out misleading headlines to fool the masses. I hope you enjoy Mr. Bagott’s article.
The Mann
Contact: Jeremy Bagott, MAI, AI-GRS
Tel: 805-794-0555



VENTURA, Calif. (February 24, 2023) – Almost 30 years ago, Alan Sokal, now a professor of mathematics at University College London, perpetrated a memorable hoax. He submitted a pseudoscientific article to a cultural studies journal called Social Text. By design, his paper was strewn with nonsense. Titled “Transgressing the Boundaries: Towards a Transformative Hermeneutics of Quantum Gravity,” the article held that physical reality was merely a social construct.

The nation’s 80,000 state-licensed real property appraisers will recognize elements of Sokal’s hoax as crusaders — appointees at places like the Federal Housing Finance Agency and the U.S. Department of Housing and Urban Development – perpetuate a false narrative that is weakening a critical guardrail in the nation’s $11 trillion mortgage market.

At the time of Sokal’s hoax, so-called “postmodernists” in higher education were waging a crusade against scientific objectivity. The “science wars” of the mid-1990s saw academics in the fields of cultural studies, comparative literature, media studies, cultural anthropology, feminist studies, and science and technology studies attacking scientists. Most in the former group knew almost nothing of the sciences they criticized.

Sokal’s aim was to see whether such a hoax paper would be published if it 1) sounded legitimate and 2) stoked the vanities and ideological preconceptions of the editors.

As professor Sokal predicted, his article gained publication in the 1996 spring/summer issue of Social Text, published by Duke University Press. His paper briefly became the toast of certain academic circles, but it was never peer-reviewed by an actual scientist.

Sokal quickly set the record straight in the May 1996 edition of the Lingua Franca journal in the article “A Physicist Experiments with Cultural Studies.” He concluded that editors at the first publication ignored the required intellectual rigor of verification and “felt comfortable publishing an article on quantum physics without bothering to consult anyone knowledgeable in the subject.”

Fast-forward to September 2021. Mortgage giant Freddie Mac scoured 12 million appraisals between 2015 and 2020 and published a study that found the sales of homes in black- and Latino-majority census tracts were more likely to appraise below the negotiated sale price than sales of homes in white-majority tracts.

While appearing to reveal something sinister about the nation’s real property appraisers, buried in the report was the begrudging acknowledgment that the comparables selected by appraisers to value homes owned by people of various racial groups tended to be reconciled within a range that differed little from one another statistically.

Tucked well into the report was the recognition, “Appraisals for properties in Black and Latino tracts tend to be slightly closer to the lower end of the [comparable] range. But the report then conceded, “the average dollar impact is less than $500.”

An impact of $500 or less off the median U.S. home sales price of $428,700 around the time of the study represented a departure of about 0.1% or less. The amount fails to rise to even a rounding error. Analysts at the mortgage giant seemed to be grasping at straws to find something – anything – wrong with the appraisals but, as they conceded, couldn’t. Systemic bias, the study found, was a phantom issue.

So, instead, the study trumpeted a finding that 7.4% of appraisals in majority-white census tracts appraised below the property’s negotiated sale price, while 12.5% appraised below the negotiated sale price in black-majority census tracts with an even wider 15.4% gap for Latino-majority census tracts.

Since Freddie Mac concedes it found no problem with the valuations beyond a statistical aberration, its finding of a contract-price-vs.-actual-value gap points to a more complicated issue in which brokers in minority areas seem to be more likely to advise buyers to agree to values that were above market. Whether this is due to inexperienced buyers, inexperienced brokers representing them, a greater proportion of brokers conflicted by dual agency, sellers with unrealistic expectations, home sales kept out of MLS systems or the prevalence of so-called affinity schemes is anyone’s guess.
Freddie dishonestly left this question unacknowledged.

The 2007-2008 financial crisis exposed the degree to which low-income borrowers were preyed upon by bad actors. Fannie and Freddie drove the exploitation by buying or guaranteeing so-called Alt-A, negative-amortizing and stated-income mortgages that proved toxic to minority homeownership in communities from Modesto, California, to Hartford, Connecticut.

But back to Freddie’s study. On the heels of its release, editors at National Public Radio misreported the findings. NPR topped the online edition of its article with the headline, “Black and Latino Homeowners are About Twice as Likely as Whites To Get Low Appraisals.” The problem? Freddie never called the appraisals “low.”

While the Freddie Mac study finds no evidence of undervaluation, the NPR story about the study somehow does. NPR’s headline should have read, “Minority Buyers Twice as Likely to be Advised to Overbid on Homes.”

Both the Freddie Mac study, along with the misreported NPR story, were seized on by disrupters in government. This group is seeking to eliminate appraisals in federally related mortgages in a misguided attempt at erasing the racial wealth gap in America. It’s the equivalent of eliminating reading tests as a way to solve illiteracy. Quietly stoking these fires have been the nonbank lenders, the fintechs, the homebuilders and the Realtors, who have been trying to weaken appraisers for decades related more to issues like bonuses, commissions and the transference of risk to the U.S. taxpayer than ideology.

The mortgage giant, which is under federal conservatorship, is no doubt being pressured by its regulator, the Federal Housing Finance Agency, to play ball and adhere to Executive Order 13985, an early Biden administration directive titled “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government.” Freddie’s study appears to have been shaded by an overarching need to find something.

Commenting on the study was Michael Bradley, a senior vice president at Freddie Mac. “An appraisal falling below the contracted sale price may allow a buyer to renegotiate with a seller,” he told NPR.

But then he seemed to come out in favor of minority buyers overpaying (and overborrowing) if that’s what it takes, “it could also mean families might miss out on the full wealth-building benefits of homeownership or may be unable to get the financing needed to achieve the American dream in the first place.”

Or perhaps Bradley was just fuzzy on which party in the transaction would be experiencing the American dream and the full wealth-building benefits of homeownership – the seller receiving a double-digit premium above the home’s market value or the buyer, who appears to be at a disadvantage in Bradley’s world view.

Professor Sokal no doubt saw the publication of his hoax paper with some degree of vindication and ironic satisfaction. Appraisers, who have been maligned by Freddie’s study and NPR’s incompetence in reporting it, are unsatisfied and haven’t yet been vindicated.

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Jeremy Bagott is a real estate appraiser and former newspaperman. His most recent book, “The Ichthyologist’s Guide to the Subprime Meltdown,” is a concise almanac that distills the cataclysmic financial crisis of 2007-2008 to its essence. This pithy guide to the upheaval includes essays, chronologies, roundups and key lists, weaving together the stories of the politics-infused Freddie and Fannie; the doomed Wall Street investment banks Lehman and Bear Stearns; the dereliction of duty by the Big Three credit-rating services; the mayhem caused by the shadowy nonbank lenders; and the massive government bailouts. It provides a rapid-fire succession of “ah-hah” moments as it lays out the meltdown, convulsion by convulsion.

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FEBRUARY 15, 2023 – Well, when you are wrong you need to admit it:) I felt all along my CPI forecast around 5.6% was too low. The CPI gets recalibrated each January and thus it is very tough to figure out where the ‘new’ numbers will fall. I sure didn’t expect them to be as high as they were. This is the first sign of inflation returning since last June.
The 3-month annualized inflation rate is 1.6%. The 6-month annualized inflation rate is 2.0%. Both figures are still much lower than the annualized rate (6.4%) and thus indicate the annual CPI should continue to decline.
My prediction for next month’s figure is 5.7%. My gut tells me it may be closer to 6.0%.
As for the July 12th forecast, the data now suggests a ceiling around 3%. The odds are still good for a figure around 2%.
Til next month…..forecasting will humble you. But, that is a good thing.
The Mann

P.S. I did want to mention that the market has told the Fed to do two more 25bp rate increases.


FEBRUARY 3, 2023 – As I review appraisal reports, I continue to see appraisers remain in the fantasy AppraisalLand regarding cap rates and values. When asked about declining values and increasing cap rates, I get the NIMBY reply. No decline in our market. Must be occurring everywhere else:)
Although the GreenStreet CPPI is for investment-grade properties, it is still an indicator of the overall CRE market.


Overall prices have declined back to pre-pandemic levels. Have you been adjusting 2021 and 2022 sale prices downward at least 10%-20%? Have you been using cap rates 75-100bp higher than those shown in 2021 and 2022 sales? Are you forecasting residential lot and home price declines of 10%-20%+ (should be WAY more for finished lots) over the next 1-2 years? Have you adjusted absorption rates in 2022 downward 50%-75%+?
As me and my wife have joked for decades, in AppraisalLand every subdivision sells out quickly….office buildings in markets that literally haven’t seen vacancy rates below 10% since the 1980’s will lease up to 95%…on and on. Vacant land that has been for sale for 30 years will have a marketing time of 12 months. AppraisalLand is a very, very happy place to be in lol
It is up to reviewers to start pushing back hard on conclusions that don’t reflect current and future market conditions. Market Value is based on looking forward thru the windshield, not looking in the rear-view mirror. Data from the rear-view mirror must be adjusted to reflect current and future market conditions.
The above has been a broken record for my entire 36-year career. You would think the industry would learn from past cycles and change quickly when the market changes. It is not acceptable to wait until sales data is available to show the decline has occurred. Sales volume dries up in a declining market. By the time you have sales data the bottom has probably occurred and the market is starting to turn up. Reports like this one from GreenStreet provide the data needed to reflect current and upcoming market conditions. The data proving a decline has occurred and may continue is readily available. Use it.
I have a dream that one day AppraisalLand will no longer exist.
The Mann


JANUARY 30, 2023 – What happened to A and B batteries? We have AAA, AA, C, and D. Why not A and B?
I would change AAA to A and AA to B. Then we would have A, B, C, and D. And the red-hair, freckle face, step-child of batteries the 9-Volt. We could make that the new E or just leave it as is.
I have a feeling I am the only one who wastes time thinking about these things:)
The Mann


JANUARY 26, 2023 – Say you saw the following list of data points: +2.3, +6.9, -1.6, -0.6, +3.2, +2.8, +0.4, +0.3, +0.2, +0.1. To be upfront, the first 6 numbers are actual and the last 4 are future estimates.
Assuming positive is good and negative is bad, when would you say the bad event occurred? Did it occur just once? Or do you see data showing multiple bad events?
To me, the bad event occurred when the data was -1.6 and -0.6. It does not occur anywhere else. Albeit, the last four numbers aren’t anything to cheer about on the good side.
I keep saying – the Recession occurred in the first half of 2022 – and asking – why is everyone saying 2023 will see a Recession?
As for the last four numbers, I have seen estimates of GDP growth around 1.0% for 2023 with the latter half of the year being the weakest. Again, it is likely there will not be two consecutive quarters of negative GDP (the definition of a Recession….like it or not….I have never been a fan….what if we had -0.5, +0.1, -0.7? technically not a Recession…but, to me, that looks like a Recession…anyway, we have had this definition for decades).

If I could define Recession using GDP only it would be 2 or 3 consecutive quarters where the sum is negative. But, no one asked me:)

Lastly, the favorite service I subscribe to is forecasting a -1.6% GDP in the 1st Quarter of 2023. That would be a significant decline. The argument is over half of the 4th Quarter’s 2.8% increase was due to increasing inventories and that will be fully reversed in the 1st Quarter.

I haven’t even tried to figure out how to forecast GDP. Forecasting CPI was a big enough challenge. For now, I will leave GDP forecasting to others.

The Mann


UPDATE FEBRUARY 6, 2023 – Most importantly, Happy 50th Birthday to my Step-Daughter. You know you are old when your kid turns 50! Ouch.

I saw a statistic today that about 9% of households move each year. This is down from 20% per year in the 1960s. So, we have over a 50% decline in moving and over a 75% decline in population growth from the 1980s. Wouldn’t those stats tell us that the supply of houses for sale should be much lower today than in the past? I would guess that over 95% of existing and new home sales are people relocating. A small percentage might be second homes, kids leaving home and buying their first home (doubtful as most 18-year-olds don’t have the money to do such), etc.

I continue to be the lone voice that says we have an oversupply of housing. Not an undersupply. And definitely not an undersupply of 5-7 million homes as I have heard thrown around.

UPDATE – FEBRUARY 2, 2023 – The housing indicator that peaked in late 2021 and declined 38% while forecasting well ahead of time the market top has reversed directions. This indicator bottomed in October 2022 along with the stock market. It has now gone up 36% from its low. It remains 17% below its peak in late 2021. This is expected as it is unlikely the housing market will go to new highs anytime soon. However, the important factor is this indicator is forecasting a fairly strong rebound in the housing market this year. I haven’t seen anyone predict such to occur. As a side note, lumber futures are up 50% from their lows last year.

JANUARY 21, 2023 – The 30-year mortgage rate hit 6.15% this week. After some ups and downs over the past few months (as I had forecast to occur), the downturn has started again. We aren’t far from my original prediction of sub-6% rates.
Some other stats….Home sales are the lowest since 2010. I guess a low supply is fine when people aren’t buying homes:) Sales have declined for 11 straight months – the longest streak since 1999. Excluding the pandemic, home permits are the lowest since 2016.
That’s all for now.
The Mann


UPDATE JANUARY 19, 2023 – A reader sent this link about Double-U. Very interesting.

The Grammarphobia Blog: Not every “uu” is a “double-u”

JANUARY 16, 2023 – I thought I would start posting the random things that come to this crazy mind of mine. Might not be a good idea. But, oh well….
First, re our alphabet, without looking anything up on the internet, does anyone know why the letter ‘W’ is pronounced double-u and not double-v? Afterall, it is shaped like two V’s. And it would make since in our alphabet….S…T….U…..V….Double V….X….Y…and Z. So, why not double-v?
Last night this came to mind…why are our letters pronounced the way they are and why aren’t we consistent with such. Forget the vowels for now. We have Be, Ce, De, but why eF, why not Fe? It is Ge. Then the craziest one we have is H….why not He? Where in the heck did Ach come from? Jay should be Je, Kay should be Ke, eL should be Le, eM should be Me, on and on….aR should be Re, eS should be Se like T is Tee. eX is ok. whY should be Ye (not Kanye West, just Ye).
Anyway, doesn’t make sense to me. And I wonder who decided on these pronounciations.
This probably came to my mind because the letter J in German is pronounced ‘Yot’ (long o). Why???
Lastly, I have never forgotten seeing this – ask someone how to write out this sentence…There are three (To/Too/Two)’s in the English language. How is it supposed to be written? Can it be written? I know I just made an attempt. Guess that is how I would write it.
Up for any thoughts you have about the above. Especially why it is double-u and not double-v.
Feel free to email me at GeorgeRMann@Aol.Com
The Mann


UPDATE JANUARY 25, 2023 – First off, 11 months to Christmas! I just wanted to add to the record that I personally believe the ceiling for the July 12th reading will be 1.4%. Obviously, as the months go on and more data is available, I will be able to refine my forecast. But, for now, I am fairly confident the reading will be between 0% and 1.4%. We shall see….

UPDATE JANUARY 19, 2023 – This was buried in the original post below. I wanted to make it clear, and go on record, that I believe when the July 12th CPI announcement comes out there is a 95%+ chance of annual inflation being below 2%. It should definitely be in the 0%-2% range. That is the Fed’s target range. I haven’t seen anyone forecast this. If you have, please let me know. I like to check out prognosticators that have similar opinions to me and see if I can figure out what data they are using. New data between now and then can change this forecast. But, right now, I am not seeing anything that could occur to do such. However, that is why they are called black swan events, eh:) We will check back on July 12th and see if this prediction was wrong or right.

Do note that even if inflation goes down to 0%, that just means prices remain at the current high levels. People want prices to decline. But, that only occurs in a Depression or Recession. Which do you prefer – a Recession to have prices decline a few percentage points or a growing economy with prices rising? People have always adjusted their income and expenses to account for the higher prices. Just like 50 years ago when gas prices went from 30 cents a gallon to $1 a gallon. Many price shocks have occurred and we simply adjust our style of living. The same will happen this year as people accept that current prices are the new norm.

JANUARY 13, 2023 – The 2022 annual inflation rate ended at 6.5%. As I expected, that was below the 7.0%-7.1% my data was forecasting.
The next release is February 14th. My forecast is 5.6%-5.7%. That is aggressive. I don’t think I will be on the high end this time.
As I mentioned last month, the 3-month and 6-month annualized inflation figures show us where annual inflation is headed. Those figures are currently 0% and 0.3%, respectively. Thus, the annual inflation rate has to decline in the months ahead.
By the end of the First Quarter, annual inflation should be in the 3%-4% range. It should definitely be below the Fed’s 2% target by the end of the 2nd Quarter.
Remember, ask those forecasting double-digit inflation how that is going:)
Shalom and Happy New Year!
The Mann


JANUARY 2, 2023 – Happy New Year! I hope the year is good for all.
As we start 2023, the housing market is solidly in Step 4. That is when all of the cars on the rollercoaster are speeding downward together. Prices are declining and accelerating the pace of their decline.
Step 5 will be when the decline starts to slow down. e.g. annual price declines might go -8.0%, -10.0%, -11.0%, -11.5%. I expect some-to-many markets will start to see this in the 2nd Quarter.
Step 6 is when the lead cars on the rollercoaster reach bottom and start to turn up. Just the opposite of last Spring when the rollercoaster reached the top and the lead cars started downward. At this point, you have some markets still accelerating in their annual price decline and others level at their price decline level, and some where the price decline starts to head back upward towards 0%. I can see this happening in the 3rd Quarter with a slight chance it might even start towards the end of the 2nd Quarter. Readings go -9.0, -10.0, -10.0, -9.0.
The question right now is can Step 7 occur by yearend. I think there is a chance it can. In this Step the rollercoaster will be heading back upward towards say Ground Level (i.e. 0% price change in past year). There will still be many markets with negative price changes. Others will be back to near level and some will actually have positive price change readings. I would say right now no one is expecting any markets to have price appreciation this year. I think there is a chance for such to occur in the 4th Quarter in a few markets. About the same odds as last Spring when I thought full blown price declines could occur by Yearend 2022.
As always, we shall see how things play out. I will try to remember to update my forecast mid-year.
Always glad to hear your thoughts.
The Mann