We recently conducted a survey of roughly 2,000 appraisers looking for unique insight into current challenges and future solutions and received nearly 450 responses. Like any industry – especially one that's still embracing new technology – property appraisal has its fair share of challenges, the bulk of which fall into two broad categories.
Supply and demand
In 2017, more than six million homes were sold in the U.S. and there were more than two million licensed real estate agents. By contrast, there were only about 80,000 appraisers – outnumbered 25-to-1 by real estate agents. There are also about 8 percent fewer appraisers in the U.S. than there were in 2013, and 21 percent fewer since 2008, according to
statistics from the Appraisal Subcommittee.
According to recent Property Solutions data, an appraisal in a remote part of Washington State took nearly four weeks to complete at a cost of $1,800, while an appraisal for a comparably sized home in suburban Illinois took less than a week and cost only $450. The lack of available appraisers drives both prices and timelines upward.
And the problem is likely to get worse if conditions don't change – nearly two-thirds of all appraisers are
older than 50, so over the next decade the 25-to-1 realtor-to-appraiser ratio could become even more lopsided. According to a 2017
study conducted by the Appraisal Institute, declines are expected to continue over the next decade due to retirements, fewer new people entering the appraisal profession, economic factors and government regulation. The enthusiasm for training the next generation has dwindled – in the
National Association of Realtors 2017 Appraiser Trends Study, less than 20 percent of appraisers said they're currently involved with training apprentices even though more than half had done so in the past.
Of the more than 400 appraisers who responded to our survey, about 65 percent were older than 50, and
not one single respondent was younger than 30. And there is additional cause for concern since appraisers apparently don't see the issue – only 25 percent of the same respondents believe that a shortage of appraisers is an issue.
Regulatory and Licensing Burdens
Given the requirements associated with becoming an appraiser (education, training and certification), new entry into the industry can be slow – and the 21 percent reduction in the workforce over the last 10 years appears to support this. And like any industry that is heavily regulated, change in general moves slowly.
The regulatory and supply and demand challenges combine in the current low-interest environment in the U.S. The Federal Reserve continues to maintain low interest rates, which results in increasing home sales, but there aren't enough appraisers out there to keep up with the demand.
The continuing education offered in the Appraisal Industry has NOT changed in 15 years!
Though only about 40 percent of our survey respondents support the easing of licensing standards to attract more people to the industry, there was more than 60 percent support for reducing the minimum experience criteria and expanding continuing education opportunities for new approaches to appraisals.