An Acute Shortage of Appraisers is Slowing Down Real Estate Transactions

An Acute Shortage of Appraisers is Slowing Down Real Estate Transactions

Less people are choosing a career in real estate appraisal, considerably slowing down real estate transactions, according to an article in Inman News. In fact, the Appraisal Institute reported there were 2,000 fewer appraisers from 2015-2016. Additionally, with the average age of an appraiser being 53, the problem is expected to further deteriorate as more appraisers go into retirement in the coming years.

The scarcity of appraisers is especially evident in states with hot real estate markets like Colorado, where only 52 new appraiser licenses were granted and/or certified in the state for 2015, while 2016 is looking to close out with a dwindling number of only 32. This includes the major metropolitan areas of Boulder and Denver, which are consistently listed as top growing cities in the U.S.

With appraisals being an integral part of most transactions, the shortage of appraisers is serious enough to stifle the real estate landscape. The article in Inman cites several factors behind the current shortage of appraisers:

  • Demand:  The rebounding real estate market has increased demand for real estate appraisers, whose services are required before lenders approve a real estate loan.
  • Supply:  As a result of the housing crash, requirements to obtain an appraisal license have become more stringent, making it more difficult to become an appraiser. In order to earn an official license, an appraiser must spend 2,000 hours under the wing of an experienced appraiser. Furthermore, a certified appraiser must spend 2,500 hours spread across two or more years to get a license.
  • Time:  Appraisers are expected to provide more detailed appraisals, which leaves them little time to train newcomers.

As a result, transactions are being bogged down by the lack of a quick appraisal. Further, anxious buyers are dolling out more bucks for an appraiser. Mortgage brokers in the Seattle area are citing cases where clients under pressure to close on a house ended up shelling out $2,000 for a home appraisal that typically goes for $625.