Certified Appraisers at All-time High, Opportunities Coming:
Appraisal Institute study
My comments: Licensed appraisers are dwindling as FHA and many lenders will not accept their appraisals. The AQB only determined certified appraiser qualifications. When licensing started, many states set up a licensed category because there were fears of an appraisal shortage as no one knew how many appraisers existed pre-licensing. Unfortunately, state licensing requirements varied widely, with some states (i.e., IL and OK) having very minimal requirements.
Appraisers are aging. That is true of many types of work, primarily due to the aging of the baby boomers. When I started my business in 1986, the AIREA (merged into the AI) survey said the average appraiser age of their members was in the early 50s (most were commercial appraisers). Few appraisers started appraising as their first career, so appraiser age has always been higher.
The positive spin is that there will be a shortage of appraisers in the future. This is nothing new as residential lender appraising has always been boom and bust. 70% of appraisers are residential. Another positive factor is that the post-licensing qualifications of appraisers has gone up with more certified appraisers.
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Text of AI press release:
The percentage of appraisers with a state certification is at an all-time high, the nation’s largest professional association of real estate appraisers announced today. With more than half of U.S. appraisers aged 51 to 65, the Appraisal Institute anticipates opportunities for new appraisers.
The Appraisal Institute has analyzed the Appraisal Subcommittee National Registry data since 2006 using a consistent methodology, and the long-term trend is clear:
· The number of appraisers continues to decrease at a rate of about 3 percent per year;
· The appraiser population could decrease 25 to 35 percent over the next 10 years due to age attrition and fewer new entrants.
“In spite of a higher level of appraiser qualification overall, the lack of career prospects for trainees and few new people entering the profession are legitimate and serious issues, yet opportunities do exist to reach the next generation and employment options will, in fact, likely be enhanced in the coming years,” said Appraisal Institute President Richard L. Borges II, MAI, SRA.
Broader analysis suggests this is primarily due to:
· A sharp and long-term decline in the number of new people entering the field;
· A high rate of future retirements due to the high mean age of appraisers;
· Individuals leaving the profession due to challenging business conditions;
· Increasing government regulation;
· Wider use of alternative valuation technologies displacing some appraisers (especially in the residential sector); and
· A potential oversupply of residential appraisers. (Nearly 70 percent of all appraisers focus primarily on residential appraisals.)
While the overall number of appraisers is decreasing, the number of certified general and residential appraisers is on the upswing.
The analysis shows there were nearly 6,000 more certified general and residential appraisers on Dec. 31, 2012 than there were at year-end 2006. For the same period, there was a decline of nearly 16,000 licensed appraisers. About a third of the decline is because appraisers achieved certified status. A large majority of appraisers who left the profession in the past three years were licensed-only appraisers who were either relatively new to the profession or did not pursue certification.
The proportion of certified appraisers to total appraisers was 72 percent at year-end 2006. As of year-end 2012, the proportion was 87 percent; therefore, the proportion of appraisers with a certification is higher than it has ever been. While the total number of appraisers has decreased 15 percent since 2007, the data indicates that the appraiser population is more qualified overall.
Commercial, non-traditional (non-point-in-time) valuations appear to be a growth opportunity for individuals with advanced analytical, financial and mathematical skills, Borges said. He said that key growth markets might be working with accountants, financial analysts, investors and others on real estate portfolio management/analysis, purchase, lease and investment packaging. He also noted that additional areas of real estate valuation – right of way, conservation easement, taxation issues and litigation support (expert witness testimony) – could provide opportunities for professionals looking to enter the valuation profession.
Link to 2 page Fact Sheet of stats and graphs:
Thats a really very good sign for the valuation market and the property owners who want the appraiser services.
Certified appraiser no is increased by the 15% which is very great and most of them are residential appraiser.
Professional certification in the appraisal is the best certification as the demand of the expert and cetified appraisers are increasing.
Regarding the cartoon in the top right corner of this page:
I wouldn’t appraise your house if the fee was $100,000 under the current extortion based appraiser rules. Sorry boys but some of us refuse to abide by the current “pay to play” regulations.
After 20 years I returned my appraisal license to the board covered in feces to illustrate it’s true value: TOILET PAPER.
This has to be one of the most misinformed writers of the century. LMAO
I suspect that this article was written on April 1st rather than April 10th.
Happy April Fools Day to everyone.
The new requirements on education are good for the profession. With over 100,000 appraisers they want run out of appraisers anytime soon. AMCs will say anything to increase the amount of appraisers in the Business. Economics 101 the more appraisers the cheaper appraisal fees will be to AMCs. AMCs can get 50 appraisers fighting over 1 appraisal, thats their business model….AMCs don’t think appraisers should be educated “slave owner mentality” Don’t require the appraiser to be educated, then we can blame it on the appraiser(2003-2008 Crash)!!!!!!!
They are crazy. Sounds like they are intentionally trying to get rid of appraisers. This will work when noone goes into the field. Not to mention all the nonsense they are throwing at those in the field. Risk, long hours, educational requirements, c.e., Expensive Insurance and computer Programs-Being audited by idiots- All of this for about $10 per hour, Who needs it. They know that. They don’t want appraisers. They want to go by statistics. They feel their % loss will be
the same or lower. A mortgage Broker told me this and it makes more sense than all the whys etc. I Guarantee they have it all worked out. There is no way you can run a business the way it is.
Few people talk about the coming crash in residential refinance appraisal orders. When the crash hits there will be a glut of residential appraiser’s. When the residential appraisal market recovers from the crash there will be a shortage of residential appraiser’s. What will happen when the shortage comes? The government will change the laws to accomodate the banks. If I were a young man I would not enter the residential appraisal field. Good Luck!
A young man would have a far been chance of surviving a game of Russian roulette with 1 bullet in the chamber than making it as a residential appraiser today. There are two types of appraisers in the world today. Those who have already quit (the smart ones) and those who will quit. Interest rates and now beginning what will become a loooooong steady rise. AMCs are already begun to crash their fees again.
There in absolutely no doubt that there will be a severe appraiser shortage in the near future. Similarly, there is no doubt that banks will use that shortage to sell their new advanced AVM model to fill the void. The new AVM model is far superior to the old one thanks to the mega data supplied by appraisers via the UAD requirement a few years ago.
If you don’t understand this you are living in the 1960s.
If there is a need for appraisers, then they need to lighten up on the college requirements. A two year degree is sufficient not a four year plus two years on the job training. If the loan officers and realtors don’t need this much training, then appraisers shouldn’t either. When I started in this business 10+ years ago, I only needed the appraisal courses. What a drastic change to now require a four year degree plus the appraisal courses.