Job news is good or is it?

[Eli]

I've said it before, and I'll say it again. There is plenty of money to be made in this business, and talent has been, and will continue to be, attracted to this business.

What you won't see is college grads lining up to work for low-paying, abusive AMCs. The rest of the business is fine. And current appraisers will benefit from a temporary supply/demand imbalance as the market gets better.

Yes but don't leave out the regulators. They have so much control and can change things overnight almost. We've seen it, haven't we?

 

[Meandering]

Yes but don't leave out the regulators. They have so much control and can change things overnight almost. We've seen it, haven't we?

We're the only ones that have "seen it". Okay, us and Mortgage Brokers have "seen it".

 

[Eli]

Where did you come up with idea tha 40,000 appraisers have left the profession? The number of active appraiser licenses currenly is 99,994, which is down only about 10,000 from the peak

The AI published something indicating that. And, some have said in their continuing ed classes as many as half with active licenses are not practicing. I believe the 40,000 is short on the drop in number actually practicing.

The drop this year in a good job market will be interesting, coupled with the new ed requirements.

 

[Terrel L. Shields]

Where did you come up with idea tha 40,000 appraisers have left the profession? The number of active appraiser licenses currenly is 99,994, which is down only about 10,000 from the peak

I think the peak when "trainees" were generally unlicensed easily was 130,000 or more, and the current lists I've seen are ludicrous. I found one recently with a dead appraisers name on it. The exact number of full time employed appraisers is fairly limited I would presume.

Comparing anything to 2006 in the appraisal profession is ludicrous. The bubble was in full swing and any moron with an appraiser license who was not completely lazy made a six figure income with minimal effort

Many good appraisers have avoided the secondary market because they recognized the bubble and saw the potential for being sanctioned for inflated appraisals...and those appraisals were inflated because the sales were being inflated, were speculative and hence 80% of the data out there was tainted. Speculation is no basis for a "market value" appraisal. And my best years were pre-2002 and post 2006, when bankers suddenly realized they needed more realistic valuations. Banks didn't call me for inflated appraisals and I quit the secondary market long before 2006.

We're the only ones that have "seen it". Okay, us and Mortgage Brokers have "seen it".

Jonathan Miller suggested we all need to read the following...whether we like it or not.
https://www.philadelphiafed.org/research-and-data/publications/working-papers/2014/wp14-23.pdf

The results suggest that the HVCC has reduced the probability of inflated valuations and induced a significant increase in low appraisals. The HVCC also made it more difficult to obtain mortgages in the aftermath of the financial crisis...

The HVCC was designed to make appraisals more independent and objective... The HVCC has partly accomplished this by reducing inflated valuations that were prevalent during the subprime boom. But the HVCC also led to a significant increase in low appraisals, which ...demonstrate that the HVCC induced significant changes..[and] seems lenders and appraisers generally responded to the rule by becoming more conservative,
​

So we've gone from being over-valuers to under-valuers in response to the stimulus of the regulator's whip. It is great leap of faith that we think HVCC actually created this increasingly conservative stance among appraisers, since we cannot rewind history and see if that same conservatism might not have existed without HVCC in light of an imploding marketplace. I see no reason to think that more regulation will produce a better outcome so I have no enthusiasm for Eli's propensity to champion regulators as a solution to our problem


'toon from www.millersamuel.com

 

[timd354]

The AI published something indicating that. And, some have said in their continuing ed classes as many as half with active licenses are not practicing. I believe the 40,000 is short on the drop in number actually practicing.

The drop this year in a good job market will be interesting, coupled with the new ed requirements.

I know that Fannie and Freddie have received appraisals from over 70,000 appraisers in the past 2 years, and clearly there are certified generals who don't do residential and others employed in positions where they do no do GSE appraisals, so most licensed appraisers are still practicing.

Do you have a link to wherever you got that 40,000 number from...I would be curious to see where that number comes from as I have never seen an estimate that is anywhere near that, including the following chart from the AI:

 

[The Warrior Monk]

Appraisers don't like to give up licenses, notably CR and CG credentials. I would be interested in knowing how many appraisers are actually practicing. I'm continuing to see in increase in the number of non-practicing licensed appraisers. Some of these people might come back into the business if times get good, but others are non-practicing due to age.

 

[Eli]

If you google appraisal institute number of licensed appraisers you will find a link to a 2014 publication that shows 80,500 active appraisers. Again, I believe that is light due to feedback I have heard and know about those active but not practicing. If there were around 120,000 at the peak, then the math is easy for an indication.

 

[Meandering]

Jonathan Miller suggested we all need to read the following...whether we like it or not.
https://www.philadelphiafed.org/research-and-data/publications/working-papers/2014/wp14-23.pdf

I was thinking of the speed at which the regulations hit us, typically 6 months or less for HVCC, UAD and the like. The same went for MBs. However, look how long it takes for implementation on the other side of the tracks, AMC regs, 3 years with unlimited extensions, bank regs, 3 years to never, state compliance with the Feds, three years to unlimited extensions. Foundation mandates for the IVPI, 6 months to 3 years, to naw, we changed our minds and don't really need that.



While I believe firmly in open markets and free trade, I also believe an open market needs a level playing field.
Philip Hammond

 

[Terrel L. Shields]

Appraisers don't like to give up licenses, notably CR and CG credentials. I would be interested in knowing how many appraisers are actually practicing.

But how many did not have licenses in the time frames we speak? We didn't have a "trainee" status for years. But I know from the local appraisers all but a couple have cut back who are over 60. And my assistant gave up her license last year. I think 140,000 is probably not inaccurate. And with a lot of us holding licenses in more than one state, I don't trust any numbers put out by the ASC - I think they list me 5 times -

 

[timd354]

If you google appraisal institute number of licensed appraisers you will find a link to a 2014 publication that shows 80,500 active appraisers. Again, I believe that is light due to feedback I have heard and know about those active but not practicing. If there were around 120,000 at the peak, then the math is easy for an indication.

Apparently reading is not so easy for you as the AI never states anywhere that there were 120k acive aprpaisers at the peak. The AI has published stats showing that the number of actual appraisers peaked at 98,450 in 2007, by which time mortgage originations had already come way down from is 2003 peak.. You are mixing your numbers up and comparing apples to oranges....while there were ~120k appraisal licenses at the peak, due to many appraisers holding multiple state licenses, the peak number of actual appraisers was only 98,450. Now there are about 100,000 appraisal licenses held by about 80,000 actual appraisers according to the AI's data. Thus, the number of appraisers who have left he profession is nowhere near the 40,000 that you claim, but is about 1/2 of that number.

Thus, the number of appraisers has fallen less than 20% since the peak, in the meantime, mortgage origination volume in 2014 was only 30% of its peak year of 2003 and less than 50% of the volume in 2007 and that is the root cause of the downward pressure on appraisal fees