Have banks and lenders become more conservative with appraisals?

Yes, they have. With refinances, a good amount of homeowners in recent years used their homes as “piggy banks” and kept taking out equity through Home Equity Lines of Credit, because the value of their home kept going up. With the recent market correction in home values, homes do not have as much equity, so the banks/lenders are less likely to refinance a property where there is little equity remaining. With purchases, lenders have been overly conservative as well, but are beginning to loosen up somewhat. The problem we have with purchases is the lack of sales in the last six months to use as comparables.  However, as the number of transactions rises, values will firm up as the available supply of homes diminishes, and values can be more easily substantiated.