What about the real estate appraiser market? - by Steven Elliott

Steven Elliott, Elliott Gottschalk & Associates

Glad the good weather continues and sorry to see the days become shorter, in terms of the available light.  Appraising becomes more difficult when the weather turns and we lose valuable appointment time but hey, like the U. S. Postal Service, “neither rain, nor snow, nor sleet shall keep the real estate appraiser from his/her appointed rounds. 

Interest rates are still low and seem to be on track to stay that way until the end of the year.  After that who knows.   Once rates rise it will be interesting to see the impact they will have on real estate values and number of transactions.  The consensus seems to be that there will be a fairly rapid contraction, particularly in the residential markets.  However, with the unrest throughout the world and the apparent increase in terrorism, the Feds may continue to hold off in their continuing desire to begin the upward movement of rates.   

Speaking of markets, what about the real estate appraiser market.  For several years the number of licensed/certified and designated appraisers has been shrinking as a result of the aging of the professionals already in the business and the lack of “new blood”.  With the average age of an appraiser in the high 50’s, more and more appraisers are leaving the professional, with the many simply retiring.  Others are frustrated with all of the new burdens placed on the residential market by FHLMC/FNMA/HUD/VA/FHA, and quite honestly who can blame them.  The problem is compounded by the fact there are a number of perceived impediments to gaining access to the profession, and they continue to mount.  The recent increase in requirements by the Appraiser Qualifications Board (AQB) of The Appraisal Foundation (TAF), regarding minimum college degrees and additional requirements placed on supervisory appraisers as well as trainees appear as new barriers preventing individuals from gaining a place in our profession.  The ongoing requirements regarding trainee experience hours are also pointed to as a significant impediment to gaining a license and/or designation. 

A recent article in “Working RE Online” addressed a number of these concerns with John Brennan of TAF responding to these questions and concerns.  It’s a good article and find it if you can.  In summary, TAF does not yet see the shortage of appraisers that many are saying already exists.  The AQB is looking into the question/concern over Licensed appraisers who lack a college degree being unable to upgrade to a Certified level, which is mandated by FHA.  The experience portion of the requirements to be licensed or certified is viewed by the AQB as a problem, particularly for those individuals coming out of college and, therefore, are looking at alternatives to fulfill at least a portion of the experience require.  Finally, the trainee/supervisor inspection question was also raised and, TAF properly pointed out that this is not an AQB requirement but a governmental HUD/FHA/VA requirement.  This being the case, we need to talk to our local lenders and convince them that this is an unnecessary burden that serves no useful purpose.  After all, if a certified appraiser is willing to put his/her license on the line for a trainee that they are convinced is qualified to perform appraisals, why shouldn’t the lender be equally comfortable with the trainee’s abilities and competence. 

I think we all have to take stock of where we are in our professional lives and careers and continue to do all that we can to enhance the profession and enable and encourage others to join our ranks.  As I’ve said for many, many years, we have the second best job, just behind weathermen, of anyone on the planet.    

Steven Elliott, SRA, MRA, is principal at Elliott Gottschalk & Associates, Ashland, Mass.