It may be good for the business now, but experts say that the shinking number of real estate appraisers may lead the industry to a huge problem.
Market Watch reports that real estate appraisers will see their ranks dwindle significantly over the next five years, and that could mean longer waits, more expensive appraisal rates, and even low-value appraisals.
Experts lay several factors as the reasons why the appraisal demographic is not expanding. For one, the increasingly inhospitable career outlook has discouraged individuals to become real estate appraisers. According to the Appraisal Foundation, most financial institutions hire and train entry-level appraisers back then, but now, only a few still implement such practice.
As the appraisers' pool shrinks, the average age goes up. The Appraisal Institute reports that there are 78,500 real estate appraisers working in the U.S. The biggest bulk of today's appraisers are 51 years old and older, or around 62 percent of the entire population, while 24 percent are between 36 and 50. Only 13 percent are aged 35 or younger.
Also, appraisers today are required to have a four-year college degree and years of apprenticeships before they can get their certification. Back in the early 1990s, one would only need a real estate license to function as a real estate appraiser.
Appraisers play a pivotal role in every major real estate transaction. Buyers look up to their accurate valuation to ensure that they are not paying too much for a property. On the other hand, sellers want to ensure that their property gets valued right so they can benefit significantly from the sale.
The impending shortage of real estate appraisers may not be felt now, observers say. Fewer appraisers working in a large market would mean property owners and buyers are subjected to longer waits before the property is properly appraised. The delays will also mean that the appraisals will be more expensive.
Quality in appraisals will also take a hit, according to Appraisal Institute President Lance Coyle, as appraisers have to cross statelines to appraise properties, and they need to follow separate state guidelines.mHowever, this could cause appraisers to miss out several subtleties that could impede a real estate transaction.
