Last month I received my data request from the Commonwealth concerning the number of appraisers registered in Massachusetts. Here are numbers
as compared to a year ago showing a decrease of 3.8% over the past 12 months in certified/licensed residential appraisers.
The decrease in appraisers should come as no surprise as 75% of these
appraisers are over 50 years old; it can be assumed that retirement
has captured these appraisers. I found the lack of significant
increase in trainee licenses disturbing. 2012 has been a good year for
appraisers; our company has experienced a 20% increase in volume over
the last year, yet, few trainees entered the profession.
The Problem:
As has been oft written, some large lenders have specifically excluded
trainees from participation in their lending operations by requiring a
trainee to be accompanied by a supervisor on each inspection. This has
made it financially impossible to train the next generation.
Piling on:
If this were not enough, new requirements becoming effective January
1, 2015 will require certified appraisers to obtain a bachelors degree
and a licensed appraiser to accumulate 30 hours of college credits -
anyone seen a college tuition bill recently? The appraisal profession
has traditionally drawn a significant portion of quality appraisers
who do not have a degree - and that was when college was affordable.
According to the US Census nationally only 33% of people aged 25 to 35
have a bachelors or higher degree. For all age groups, the percentage
falls to 30%. That's a small pool to attract appraisers from when you
think about all the other career choices coming out of college that
offer salaries, benefits and a regular work schedule.
One more constraint on future trainees on January 1, 2015 is the three
trainee limit imposed on supervisory appraisers. A competent
supervisory appraiser can train more than three over a two year
period. The trainees need guidance throughout that period, but
exponentially less guidance after the initial 6 to 8 months of
training
The Result:
Recent financial news reports are indicating that perhaps the bottom
of the housing market has been reached and a nascent real estate
recovery has taken hold. If this isn't true for 2013, it will be
coming soon -- and beware if mortgage volume increases to pre-crisis
levels. An annual decrease of appraisers by 3.8 percent and an annual
increase of mortgage volume by 15% to 20% could cause a long wait for
an expensive appraisal.
Jonathan Asker is the 2012 president of MBREA and is CEO at North Atlantic Appraisal Company, West Bridgewater, Mass.