Everyone has heard the term “Catch-22”, a phrase that can have vastly different meanings depending on the circumstances for which it is used. In the case of real estate appraisers, the industry is running into a huge Catch-22 and the outlook is not very good for many involved. The latest statistics from the Appraisal Institute bears that out.
From their report in June of 2014:
“The number of active real estate appraisers in the U.S. stood at 80,500.The number of appraisers decreased at an average rate of 2.6 percent per year over the past six years. A broader analysis suggests the rate of decrease could rise sharply over the next 5 to 10 years due to retirements, reduced numbers of new people entering the appraisal profession, economic factors, and greater use of data analysis technologies.”
The weak market, increasing regulations and smaller fees have also factored into the dwindling appraiser population. “It’s definitely something we’re aware of and addressing within our network,” says Joni Pilgrim, Co-Founder of Nationwide Appraisal Network (NAN), one of few Appraisal Management Companies registered in all 50 states. “After the turbulence that started in 2008, regulations became tighter and the market really dried up for a while, forcing appraisers out of the business. It’s 8 years later and we have seen a lot of rebound in home sales, but those appraisers never came back and many that stuck with the business are now around retirement age. In fact, over half of the current appraisers are between 50 and 65 years old.”
So why aren’t more young people jumping into the appraisal business? According to NAN Co-Founder Cari Burris, there are a number of factors. “People are a bit hesitant since the fall-out of 2008. That period in history really hurt the appraisal profession. There was no money to lend and therefore few homes to sell. NAN does not foresee that kind of bubble burst in the overall current landscape. But even if there was a slowdown, our business is set up so that our appraisers would never suffer from a lack of work.”
However, that doesn’t solve the overall problem of dwindling appraiser professionals. How can people be encouraged to enter the profession and make it easier and faster for one to transition from apprenticeship to licensure while maintaining competency and experience?
A big concern is that the Real Property Appraiser Criteria has been updated over the past decade with changes to the education and examination requirements for licensure or certification. However, the appraisal experience requirement has gone virtually unchanged.
Appraisal experience is important to becoming a minimally competent appraiser on whom the public can rely. There is much discussion, however, as to whether there should be alternatives to fulfilling the appraisal experience component of the Criteria in lieu of the traditional supervisor/trainee model currently in place.
NAN understands the importance of these types of discussions because of the high standards they’ve set in the industry regarding appraiser vetting. Finding high quality appraisers doesn’t happen overnight. “Requirements in general are more stringent,” adds Burris. “And NAN’s guidelines require nothing short of excellence for our appraisers. We have to verify experience and competency with each appraiser we select for an appraisal assignment. This task is becoming more and more difficult as new loan products come about. And the Catch-22 is that while seasoned appraisers are retiring, very few higher education programs are really focusing on real estate and appraisal certification.”
It’s not all doom and gloom, though, says Pilgrim. “As members of several industry associations, we along with many are brainstorming on ways to make the appraiser career attractive to young people again. We know that the AQB is also looking into alternatives such as different tracks for obtaining experience as well as revising the credentialing system and restructuring licensing classifications. At Nationwide Appraisal Network, we take this matter seriously. We hope that our continued participation with industry affiliates and appraiser vendors can work towards creating a profession that is once again thriving and succeeding well into the future”, Pilgrim concluded.
About Nationwide Appraisal Network – NAN is an industry leader in appraisal management, providing a unique approach to valuations through customization, innovation, and quality.
www.Nationwide-Appraisal.com or call 888-760-8899