As appraisers begin to wind down the year 2022 following a two-year stint where change and adaptation to new methods reigned supreme, there are specific areas where appraisal demand figures to be very prominent.

“Of course, we are heading into a period of less lender demand for appraisal reports.   I think quality, turnaround time, and the price will drive the demand for our appraisal products,” David Beal, appraiser and owner of Beal Appraisal in Texas, told Valuation Review.  “The MC (market conditions) (Addendum For 1004 MC) sheet is typically no longer required in residential reports. However, most of the information on the MC should still be in the market condition section of the appraisal. 

“It will be more important than ever to look at the supply and list‐to‐sale ratios of a market.  We will also need to continue to watch the past and present amounts of seller‐paid concessions,” he added.  

With regards to where things will become increasingly competitive in the appraisal industry, Beal noted that lenders will need to get more competitive.  They will demand faster turnaround times and lower report prices.  Less lender work will also lead to more appraisers seeking non‐mortgage clients, he said.

Beal also pointed out to us that after receiving his designation from the Appraisal Institute, he began to have an increase in both lender and non-lender orders.

We also asked the Texas appraiser how will voids in the market be filled, and can younger talent (appraisers) come along to fill those gaps?

“A lower beginning pay scale in this industry and much more competitive pay in other areas has always been an issue with attracting young talent,” Beal said. “I have talked to several more people who want to start in the appraisal industry but do not see this as a long‐term career goal.  Most younger appraisers I know who see a lifetime career in residential have families in the business.”   

Additionally, on the subject matter of whether extensive training and specific requirements will help attract more into the profession, it is Beal’s opinion that one issue of note is that this business's upside does not typically occur until later in one’s career.  However, the range of companies that hire appraisers, he says, allows this industry to have benefits that are attractive to many people. 

“Smaller appraisal companies can offer a more flexible work environment and a chance to have time outside the office.  In contrast, larger corporate firms may have opportunities to move into other real estate careers.  Showing this range of benefits could attract more people,” he said.  

Beal also addressed the implementation of new technology helping the profession move forward and its potential to streamline the workflow process.  Still, it remains to be seen if this will this be a huge barrier for entry into the appraisal profession.

“When I started this business, most residential appraisers worked for small- to medium-size offices.  At that time, most companies had an owner who brought in the work, and the lack of technology made it necessary to have an office staff,” Beal told us. “As technology advanced and some deregulation occurred, many residential appraisers went out independently and started single‐person companies from home.  These independent firms generated more income for most individual appraisers.  The downside is that this one‐person environment makes it challenging to have a trainee and limits entry into the profession.  

“Now we hear about tech wanting to create sizeable ‘Uber‐like’ appraisal companies with one group that runs around inspecting houses and another at the ready‐to‐write appraisal reports,” he added. “This type of company’s success is sure to lead to fewer quality reports and less income for the individual appraiser.  I cannot speak to someone thinking about this industry without telling them about this constant push for deregulation and change.”  

Beal also stressed that appraisal companies can make big changes to attract and retain talent moving through 2022 by explaining the benefits of the work. And as far as specific changes he’s seen regarding appraisal work in his state and if business continues to increase, or has there been a downfall, the veteran appraiser pointed to rising interest rates and slowing the housing market will lead to a decline in the need for mortgage appraisals.

He then shared thoughts about what has changed the most during his career as an appraiser and offered commentary as to where he sees the profession going in the days, months and years to come.

“Over the past few years, we have had historically low interest rates and an incredible demand for lender appraisals.  We have seen supply chain issues in almost all industries,” Beal said. “I believe that appraisers handled the past couple of years reasonably well.   Like virtually every other profession, appraisers have times when things are busy, and work slows down.  The big question is what is a reasonable number of appraisers for the long haul.”