One of the most important issues facing residential real estate in the coming years has to do with the appraisal profession. Research by the National Association of REALTORS® shows that though appraisers are generally satisfied with their work and expect to stay in the industry, their median age is close to 55. As a result, a big wave of retirements is expected in the next 10 years.
By itself, that’s not a big issue, but because relatively few new appraisers are being trained today, the profession could be left with thinning ranks. What’s behind the lack of training? In NAR’s recent research, current appraisers say they have cut back on providing training because they seldom get compensation for it. What’s more, clients rarely accept trainees’ work, so it’s left to the trainer to do both the teaching and provide the end product.
Learn how requirements for real estate appraisers have increased recently.
The training issue might be an even bigger problem for VA loans, as a recent hearing in the House made clear. Lawmakers met earlier this week to try to understand why veterans have to wait so long to get an appraisal done, especially in rural areas. It turns out, VA loans are the job assignments appraisers are most likely to turn down. As a result, it’s not unusual in some areas for there to be very few VA-approved appraisers. The result is a bottleneck that hurts veteran buyers at a time when the market is moving rapidly.
The possibility of an appraiser shortage is a top story in the latest Voice for Real Estate video from NAR. The video also looks at the mixed state of home sales nationally. On one hand, the number of closed sales is down, suggesting a market that is struggling to reach capacity, but on the other, contract signings are up, suggesting sales could see an increase despite market challenges.
The one constant is that households want to buy, according to NAR chief economist Lawrence Yun. For that reason, as long as the industry has homes to sell, the demand will be there—especially since consumers are increasingly confident about the economy.
The video also looks at NAR’s efforts to ensure federal flood insurance is reauthorized before it expires this fall and that any tax reform passed by Congress does not harm real estate. That means not just protecting the mortgage interest deduction but also protecting property tax deductions and 1031 like-kind exchanges, among other benefits.
—Rob Freedman, REALTOR® Magazine
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