Angie

Recently lenders are requiring their appraisers to use comparable solds no older than 3 months.

Many of homes the real estate markets across the nation have depreciated in values this past year or two.

On the 1st appraisal, lets say done spring of '07, theoretically the appraiser could have used comparable sold properties as far back as spring of '06.

Currently, lets say an appraisal done December '07, the lender could have required the appraiser to use comparable solds no older than September '07.

If the market of that home has declined in value since spring of '06, the result would be a lower appraisal value for that proeprty, given prarameter requirements to establish current value.

Best of luck

The housing market is a living market, much like the stock market. And while we're not that used to our housing values going down, it actually has occurred recently in many markets across the united states. I don't know your market, but it's entirely possible that your area has seen a 13% decrease in property values, and that would be reflected by your new appraised value.

Unless you need to sell right now, I wouldn't worry too much about it, as eventually you'll recover that "paper loss" when the market begins to move back upward.

If you do need to sell now, the good news is that appraisals aren't considered the best method of determining market value. The best way to find a true market value (what it might sell for on today's open market) is to contact a few good local Realtors and ask them to prepare a Current Market Analysis (CMA) for you (this is typically a free service). That market analysis goes beyond square feet, and takes into account; curb appeal, location in the block, condition, view, recent local sales, pendings, and actives.

how old is your house?
this is quite common with newer homes in subdivisions.
here's what happens:
let's say you buy one of the first homes in a new development for $140k. you live there for two years and then decide to sell. meanwhile, the builder keeps building similar homes in your subdivision. if he overbuilds, or there's a turn in the market, then suddenly there are a ton of brand new empty homes on the market. when you try to sell yours, you are competing with homes that have never been lived in. you have to drastically reduce your price in order to compete.
also, from a buyer's perspective, a price increase of $1000 equates to about $7/month increase in their payment. so even if you drop yours to $10k below what a new one is priced at, it's only a $70/month difference to a buyer. most buyers are going to opt for the brand new house for $70/month more.

An appraisal is used to determine the "market value" of your home. This can change if the real estate market in your area has changed greatly over the last year. Appraisers use a variety of methods, but one common iapproach is the sales comparision approach, or market data approach, which is determined by reviewing the properties in your area that have sold over the last year to 6 months that are comparable to your own property. If homes have sold in your area at much lower rates over the last year this will affect the overall outcome of this type of appraisal.