Home Appraiser Shortages Present New Problems
If you’re unhappy with how long it takes to get a real estate appraiser you’re not going to like this story! Apparently over the next 5 years the number of real estate appraisers is predicted to shrink, meaning appraisals will cost more, you’ll have to wait longer, and the quality of the appraisals may decrease to keep up with demand. This may mean good news if you’re an appraiser but to millions of families trying to sell their home quick this news could come as a nightmare.
The Numbers are Dropping
There is approximately 78,000 real estate appraisers which is down by 20% compared to 2007 according to the Appraisal Institute, an industry organization. That number is predicted to decrease another 3% next year, and every year after that for the next decade. That decline is almost solely among residential real estate appraisers, instead of a balance between residential and commercial. This drop is unlikely to dramatically effect most Americans right now, because many appraisers are still working near major urban centers.
Craig Steinley from Steinley Real Estate Appraisals in South Dakota says, “As an appraiser, I should be quiet about this shortage because it’s great for current business but what will undoubtedly happen, since the market can’t solve this problem by adding new appraisers, [is] it will solve the problem by doing fewer appraisals.”
Experts from across the industry are blaming a poor career outlook for appraisers which attracts fewer and fewer professionals. Many institutions would once hire entry-level appraisers but very few do believing it to be risky. John Brenan the director of appraisal issues at the Appraisal Foundation says the marketplace is fearful of losing revenue by training new replacement appraisers and is instead focusing on their own bottom line dollar. Plus it once took two years to become a licensed appraiser, but that’s changed to a four year college degree.
Brooke Newstrom who apprentices as a real estate appraiser for Steinly said, “there were definitely easier options of career paths I could have chosen.” Just to get where she’s at now took almost two years of networking, cold calling and attending real estate appraisal conferences before finally getting the job. This type of grueling process just presents a path that isn’t nearly as lucrative as other careers. Those who do stay in the industry will simply be stretched further and further and more residential home buyers will find themselves paying too much for their home.
In order to catch up to demand the industry is suggesting some unique solutions to say the least. One such idea is to create a shorten exam that’s based on competency to help get trainees licensed quickly. If someone has a background in real estate, just from another side of the industry like a realtor, they can take a quicker training path, pass a competency test and get licensed. Steinley says, “real estate valuation is hard to do, and you need to get it right” meaning proper education is important but “it’s almost as if you have some regulators trying to keep people out.”
Where the market goes from here will be interesting to watch over the next number of years, but one thing is for sure you’ll need a good recommendation on a home appraiser. Otherwise you’ll soon find your property didn’t have as much equity in it as you originally thought, and for some that may mean the realities of an underwater mortgage. Rough times are ahead but as the market presents new problems for appraisers and homeowners alike someone in the industry will surely meet the demand, it’s just a question of quality moving forward.