BY SARAH TREFETHEN
Real estate appraisers are showing a little gray.
The total number of appraisers in the United State has dropped from a high of almost 100,000 in 2007 to 86,000 at the end of last year, according to data compiled by the Appraisal Institute. And of those still in the industry, 37 percent have been in the field 21 years or more.
The industry has been hit with post-financial crisis regulatory changes on top of the struggling economy. And the number of new licenses issued has dropped by about three percent for each of the past three years, according to the AI.
“Most of our members are males in their 60’s and 70’s. They’re retiring and they’re passing away at a greater rate than we’re gaining new members,” said Eric Haims, a second-generation appraiser and senior vice president at Jerome Haims Realty in New York.
“It’s an interesting question. What happens in a profession when there are no newcomers?” said Dan Aarons, chief executive of the appraisal and consulting firm Aarons & Associates.
The role residential mortgages played in the 2008 financial crisis led states to increase requirements for appraiser licenses, according to Haims.
“They’re increased the barrier to entry significantly,” he said. “Which is a good thing, because you had people doing appraising who weren’t fully qualified.”
Today, in New York State, becoming a state licensed real estate appraiser requires course work, a written test and 2,000 hours of experience over a period of not less than two years.
On top of the stricter licensing requirements, residential appraisers have also seen their fees drop as more and more lenders use appraisal management companies as a way to comply with appraiser independence requirements in the Dodd–Frank Wall Street Reform and Consumer Protection Act.
That means appraisers have less income to pass on to support workers like interns and trainees, said Aarons, who is also an adjunct instructor at NYU’s Schack Institute for Real Estate.
He has seen some students give up the study of valuation because they haven’t been able to find internships, and students now face a chicken-and-egg problem of fewer course offerings to choose from.
“If you talk to appraisers, now there’s actually demand. There’s work coming in, but there’s been this five year period where no new people have been trained,” Aarons said.
The board of directors of the Appraisal Institute recently voted to adopt a new business model for the organization by 2016, moving from a professional association of appraisers to a professional society, with higher requirements for membership.
Though the details of the transformation have not been worked out, institute spokesman Ken Chitester said, the result will likely be a smaller, more highly-qualified group of members.
Appraisers are unsure if the ranks of their profession will grow again.
“The demand for our services did drop during those recession years, but it’s starting to come back now,” Haims said. “Hopefully those higher requirements won’t scare people away.”
Haims and Aarons both said they would encourage their school-aged children to pursue the career.
“I think it’s a great profession,” said Haims.
“It’s an honorable profession, and it’s a great mix of field work and office work. You’re not going to be super wealthy, but you’ll have a nice lifestyle.”
In Aarons’ continuing education course on feasibility analysis, he said, many students encounter the tools of appraisal for the first time as they assemble a market analysis for a piece of real estate.
“When they get to calculate the value of what their project is, their eyes do start to light up,” he said.