Things that may matter in appraisal in 2026 - by Bill Pastuszek

As we move through the first quarter of 2026, New England appraisers face a real estate landscape is defined by paradox: a return to market “normalcy” that feels anything but normal. For appraisers and the clients who rely on our work, the post-pandemic frenzy of rapid appreciation and “buy anything at any price” has been replaced by high borrowing costs, high development costs, persistently unrealistic seller expectations, and what seems to be a constantly shifting political environment.

In this climate, traditional valuation is being challenged. It’s not just about finding the “right” comps, but trying to understand the friction present in markets.  Following are critical appraisal issues that challenging New England’s real estate appraisers. 

1. The New England multi-family market remains a fortress of stability in 2026, driven by a chronic housing shortage and “sticky” interest rates that keep would-be buyers in the rental pool. While Boston remains the primary generator, secondary markets like Worcester, Providence, and South New Hampshire are seeing heightened demand for transit-oriented developments. Investors are prioritizing high-yield “missing middle” housing as vacancy rates hover near historic lows.

2. Similarly, the industrial sector has evolved from a pandemic-era gold rush into a disciplined “flight to quality.” Demand for last-mile logistics centers and cold storage facilities near the I-95 corridor continues to outpace supply, maintaining record-high rents.

At the lower end of the market, smaller owner occupant space and contractor style space, including yard space, continues to show strong demand. Competition for limited offerings is generally strong.

3. The Integration of AI and Big Data.
Another “Golden Age of Data” has arrived, and with it, challenges to appraisers in terms of reporting and development. The Standards Boards has issued an exposure draft that addresses the issues that AI raises and that appraisers need to grapple with how to use AI effectively and in line with the professional responsibilities that appraisers under USPAP must meet. The Standards Board rightly classifies AI as a tool that does not replace appraisers’ judgment, critical thinking, or ethical obligations. 

Informed appraisers can make use of AI to save time, to undertake menial tasks, and to gather and organize data so that there is a “human” check on AI tendencies toward fanciful conclusion and hallucinations. Data driven modelling needs human judgment to make sure that AI generated models don’t miss the subtle signals that an analysist with local expertise and a deep knowledge base can detect.

4. The Implementation of UAD 3.6 and Reporting Modernization
This one applies to residential appraising. It’s mentioned because it is part of a trend that will have ramifications for commercial appraisal reporting. The “how” of 1- 4 family appraising is undergoing its most significant shift in decades. The transition to the Uniform Appraisal Dataset (UAD) 3.6 is now in full swing. This is not just a form change; it is a fundamental shift toward data-driven, standardized reporting.

The new protocols require a steeper learning curve for the practitioner where the form becomes dynamic based on property type. Market condition adjustments  move away from “straight-line” indexing for market conditions to individualized rate-of-change adjustments for each comparable.

The form is designed to standardize reporting output but also provides development challenges. While appraisal basics remain the same, residential appraisers are faced with an unprecedent challenge to adapt.

5. Addressing Appraisal Bias and Public Trust
The profession continues to grapple with the critical issue of appraisal bias and the “appearance of it.” With the Appraisal Standards Board providing clearer guidance in the latest USPAP updates, there is a renewed focus on transparency.

In New England, where historic redlining and socioeconomic divides have deep roots, our responsibility is to provide value conclusions that are independently and impartially supported. Strengthening public trust is not just a regulatory requirement; it is essential for the long-term health of our industry.

Conclusion. The theme for 2026 is “getting used to more uncertainty.” Appraisers have always had to do with change; it’s the volatility of the past decade or so that it is much more difficult to manager.

With access to more data and the tools with which to analyze, the appraiser’s role has evolved from a recorder of history to a sophisticated analyst of market behavior. To put it more clearly, getting the right comps isn’t enough. More importantly, what do the indicators the data show in the context of the effective date. Data isn’t enough, judgment and the ability to analyze and convey the results cogently is the key to successfully navigating ever more complex market conditions.

William Pastuszek Jr., MAI, ASA, MRA heads up Shepherd Associates LLC, Neeham, Mass.