A recent article by MarketWatch confirms what many appraisers have known for years: the real estate appraisal profession is shrinking. Now, that may be a good thing, a bad thing, or maybe a little of both — it all depends on whether you’re on the supply or demand side of the equation. Over the long term, though, the substitution effect will hold true. If the price becomes too high because a lack of competition, the market will eventually provide a substitute for real estate appraisals. Some banks believe that’s already the case, which is why in-house evaluations and AVMs exist.
Job Outlook for Real Estate Appraisers: Key Points
- According to the Appraisal Institute, there are 78,500 real estate appraisers working in the United States. That’s down 20% from 2007, and that number could fall 3% per year for the next 10 years. Much of the drop has been in the residential, rather than commercial.
- The pool of active real estate appraisers is getting older: Sixty-two percent of appraisers are 51 or older, 24% are between 36 and 50, and only 13% are 35 or younger.
Industry experts blame an increasingly inhospitable career outlook. Financial institutions used to hire and train entry-level appraisers, but few do anymore, according to John Brenan, director of appraisal issues for the Appraisal Foundation, which sets national standards for real estate appraisers.
That has created a marketplace where current appraisers, mostly small businesses, are fearful of losing business or shrinking their own revenue as they approach retirement. Many have opted not to hire and train replacements.
The requirements to become a certified residential appraiser have also increased over the past couple of decades. Before the early 1990s, a real estate license was often all that was needed. Today, classes and years of apprenticeship are required for certification.
The MarketWatch article is well written, and gives an excellent overview of the current state of the appraisal profession. You can read the whole article here.
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