Real estate appraisers are quietly disappearing in the mortgage industry as less young careerists are opting to enter this field, which could in turn, pose serious risks for both lenders and consumers such as added costs and lengthy real estate delivery times.
Data from earlier this year presented by the Appraisal Institute Research Department showed that the number of active appraisers in the U.S. stands at 78,500, down 3 percent year-over-year and down 20 percent since 2007.
The Appraisal Institute also projects that this number will continue to fall for the next five to ten years. A number of factor will influence this continued decline including: retirements, fewer appraisal career entrants, economic factors, government regulation, and greater use of data analysis technologies.
The research also showed that 19.3 percent of appraisers hold a license or certification in one or more states outside of their home state, a number that has grown over the last five years. This indicates that appraiser are traveling out of their typical work areas to perform appraisals.
But one group hopes to change the direction the appraisal industry is heading before these numbers get dangerously low.
The Five Star Institute's National Appraisal Congress (NAC), a member-led group of appraisers and appraisal management companies gathers periodically to collaborate on sustainable solutions for issues impacting U.S. appraisers and their profession.
NAC Goals & Strategies:
- Educating and Mentoring the Next Generation of Appraisers
- Removing Barriers to Entry in the Appraisal Industry
- Alleviating Future Shortages of Professional Appraisers through Advocacy, Education, and Training
Jordan Petkovski, VP, Chief Appraiser at TSI Appraisal and Chairperson of the NAC told MReport, "The lack of new entrants into the residential appraisal profession is the single most concerning challenge we collectively face."
He added, "If this trend isn’t remedied, through changes at the Appraisal Qualifications Board level relating to experiential requirements for certification, or through more practicable means of utilizing trainee appraisers, this continued erosion of service providers will not stop."
But Petkovski has a plan of action to get these appraiser numbers moving upward.
"Our most immediate opportunity to increase the number of service providers will be found within the production environment," he said. By allowing trainee appraisers to operate independently of their supervisor during the physical inspection process (with structure in place to ensure the trainee has adequate competency to perform that specific function), we can improve the financial proposition to the supervisor, subsequently increasing the revenue potential of the trainee."
Petkovski cautions that this "a near-term solution, but it is a solution that would work to stimulate interest in becoming a residential appraiser, all while increase the earning potential of entrepreneurial supervisory appraiser’s.”
To read more about the Appraisers and the National Appraisal Congress, visit the September 2015 issue of MReport.
Editor's note: The Five Star Institute is the parent company of the National Appraisal Congress, MReport, and theMReport.com.