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Survey Finds Appraisers Concerned About Low Inventory, Rising Rates

A recent survey from ""United States Appraisals"":http://unitedstatesappraisals.com/ shows appraisers are less confident in the overall state of the housing market than they were at the end of the first quarter. The quarterly survey was completed by the company's nationwide panel of residential appraisers.

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When asked about their current level of confidence in the housing market, 49.6 percent of respondents answered ""mildly or moderately"" strong, while 14.5 percent said ""mildly or moderately weak."" The level of confidence observed in the Q2 survey was slightly below that of the Q1 survey, when 54.5 percent of appraisers indicated a mildly or moderately strong outlook.

Meanwhile, neutral replies increased from 24.8 percent after the first quarter to 29.7 percent after the second.

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""Appraisers tend to focus on the local markets in which they work and are not typically concerned with national numbers or reporting,"" said Aaron Fowler, president of United States Appraisals. ""By polling our nationwide panel of local appraisers, we believe that in the aggregate we receive a solid interpretation of the national marketplace.""

Though confidence slipped a bit, Fowler noted numbers are still fairly strong, remarking, ""Overall, it is good to see continued optimism in our appraiser community.""

Opinions were slightly better on the subject of home values, with 70.7 percent of respondents reporting an increase in values in their area compared to 65.4 percent at the end of the first quarter. Only 6.6 percent of respondents reported depreciation in their areas.

Polling also revealed a large shift in order volume, reflecting the recent declining trend in mortgage applications. About one-third (33 percent) of those surveyed reported a decrease in volume in the second quarter compared to 15 percent in the first.

When asked about their particular concerns, many appraisers pointed to inventory issues, with one saying home values are ""[m]aybe increasing a little too fast due to low inventories"" and other noting that ""[h]omes priced correctly are moving"" in the current environment.

Interest rates are also weighing heavily on appraisers' minds. One respondent said he or she is worried about ""artificial interest rates,"" believing they will have to go up, while another anticipates a slowdown in the market if they continue to rise.

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