You might want to look at the link below.
in ONE YEAR the average price per square foot dropped 25%.
My bet is that your property did in fact decline that much in value.
Sorry to say....
Here are some stats for Maywood you may be interested to know.
2006 average sales price:
3 bed $183,021
4 bed $195,588
5+ bed $ 189,161
2009 average sales price:
3 bed $57,407
4 bed $71,071
5+ bed $ 88,200
FYI there are many towns in the surrounding area that have seen values fall as much as these.
You know what would be truly incredible? If you got a letter from your County reducing your taxes DRASTICALLY because your property value has so "crashed". Betcha you don't....
My understanding (and I'm not an appraiser:disclaimer) is that an appraisal on a home not in distress should not have all distressed property as comps. Some Lenders will even allow up to 6 comps and allow you to go a little out of the immediate market if there is absolutely nothing but foreclosed properties in your market, to find regualar comps. I guess it depends on how conservative versus how aggressive the Lender is.
This is where the reason for the loan becomes important too. You would probably get better options with a rate and term refinance (to reduce payments) over, for instance, a cash out loan., or with an FHA over a Conventional loan.
I say look into other Lender options so you have enough information to make an informed comparison, and therefore, decision
Unfortunately the bulk of sales this year in Maywood have been foreclosures. You'd be hard pressed to find a close property that wasn't. 91 houses have closed since the beginning of the year and 86 of them have been $150,000 or under 76 of those were under $100,000. Currently there are 148 houses on the market. 100 of them are under $150,000. With stats like these, it's understandable why this appraisal came in where it did.
The numbers from 2006 are higher but not much better. 181 sales for the same time period with 101 of the at $150,000 or under.
This always brings up the issue of having to fit in a Lender's "box". Did you use a Broker? If not, you should probably consider that. Brokers have access to several Lenders and if this is an FHA loan, they can order from any HUD approved Appraiser, rather than being stuck with someone inhouse, that might not even be from the vicinity of the subject property. With conventional loans, the Lenders now order the appraisers in house, ergo, this kind of thing might happen.You could dispute but I don't think it will serve any useful purpose. The appraisal guidelines were actually reviewed to allow appraisers to ignore "distressed" properties as comps in the valuation of regular properties for loans. This is where your problem lies. Frustrating, yes, unusual, no.
With an FHA loan, we can assist you by ensuring that we use an FHA approved appraiser who knows the market as well as the USPAP (appraisal) guidelines.
That is a huge difference but there are several similar horror stories out there. I would be interested in a few more details - what is your loan amount? Is this a rate and term or cash out refinance?
Should you need a second set of eyes to review your loan, I would be happy to take a look at it.
Good luck to you. Don't give up just yet whatever you encounter. A lot of people in the same situation have actually ended up with better luck simply by saying a nice "Thank you", and moving to a different Lender.