Tight Market: Ranks of Appraisers Continues To Shrink
PROVIDENCE, R.I.-The ranks of the appraisal profession are shrinking fast. For home lenders, that spells higher costs, longer turnaround times and poorer appraisal quality in future years.
While there's less appraisal work to go around these days than there was a few years ago at the height of the housing market boom, lenders fear that when the market does rebound, there won't be enough qualified appraisers available to do the job for them, according to an analysis by American Banker, an affiliate of Credit Union Journal.
A dwindling appraiser population would lead to an "absence of local expertise," said Kurt Noyce, the chief executive of the Providence, R.I., lender Embrace Home Loans.
"If you end up with thinning resources you're going to have appraisers extend their reach to go into markets where they maybe don't have as much exposure and expertise in, and they're not going to be producing the same results," he said. "If the absence of resources led them to stretch and pull people in from other areas because they didn't have suitable people coming in, that might create an inferior product."
New regulations, a weak mortgage market and lower fees have driven many appraisers from the business. Many more, meanwhile, have reached retirement age. And with fewer people joining the profession, there aren't enough new appraisers to replace the ones on their way out.
"We're real concerned that certified appraisers will become extinct," said Jennifer Creech, the president of InHouse Inc., an Orange, Calif., appraisal management and technology company. "As the pool of talent shrinks, how do you overcome that?"
The most recent data from the Appraisal Institute, a Chicago trade association, shows that the number of appraisers has declined 6.6% since 2007, to roughly 92,000 at Sept. 30. Nearly half of all appraisers are between the ages of 51 and 65. Less than 12% are under 35.