One of the most important issues facing residential real estate in the coming years has to do with the appraisal profession. Although appraisers are generally satisfied with their work and expect to stay in the profession in the years ahead, the median age of appraisers is close to 55. As a result, a big wave of retirements is expected in about 10 years.
By itself, that’s not a big issue. But because relatively few appraisers are being trained today, the profession could be left with thinning ranks after the retirement wave hits.
What’s behind the lack of training? In recent research from NAR, appraisers say they don’t provide training as much as they used to because they get no compensation for it. What’s more, clients rarely accept trainees’ work, so it’s left to the trainer to do both the teaching and the work product.
The training issue might be an even bigger problem for VA loans, 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 veterans when time is important to sellers.
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 the home sales market nationally. On the one hand, closed sale are down, suggesting a market that is struggling to reach capacity. But on the other hand, contract signings are up, suggesting sales could see an increase despite the market challenges. The one constant is that households want to buy, NAR Chief Economist Lawrence Yun says.
For that reason, as long as the industry has homes to sell, the demand will be there, especially since households 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 what NAR is doing to ensue any tax reform that’s 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 link-kind exchanges, among other things.