Waivers are not the whole problem for appraisal demand.

[TerryRohrer]

Within 3-5 years I wouldn't be surprised if the number of licensees completing GSE work dips to 25,000. Might even see one of the software providers go bankrupt. Then, whatever subsequent refi boom happens, appraisers won't be equipped to handle it, and consumers will be paying for $1,000 appraisals again, with pressure to increase waivers.

I think this is a real concern, and fairly likely.

 

[CGinMN]

Question: Why are appraisal fees higher in the states with the lower demand for appraisal services, meanwhile while fees are lower in the states with higher demand? As GSEs and AMCs make appraisal businesses less viable (via waivers and other policies) does that increase appraisal costs to consumers? In other words, if appraisers need to make $7,000 a month to survive, in Florida the most efficient way to do that is to complete 20 at $350, but in North Dakota the most efficient way to do that is to complete 10 at $700.

 

[TerryRohrer]

Conventional	53.2%
Portfolio	23.7%
FHA and VA	19.8%
Private-label securities	3.3%

[th]

Loan type​

[/th][th]

Origination volume, 2022​

[/th]​

2023 U.S. Mortgage Statistics | Bankrate

Mortgages account for almost three-quarters of household debt, but far fewer are taking on new ones these days.

www.bankrate.com

 

[alebrewer]

Then, whatever subsequent refi boom happens, appraisers won't be equipped to handle it, and consumers will be paying for $1,000 appraisals again, with pressure to increase waivers.

That is, IMO, the entire reason for this exercise. I think a lot of folks see the refi boom of the 19-21 era as something that might happen again - even though the odds of that are literally zero. Nonetheless, machinery is in place now to ensure that doesn't happen - 'that' being the $1000 appraisals and 2 month TAT's.

 

[TerryRohrer]

Question: Why are appraisal fees higher in the states with the lower demand for appraisal services, meanwhile while fees are lower in the states with higher demand? As GSEs and AMCs make appraisal businesses less viable (via waivers and other policies) does that increase appraisal costs to consumers? In other words, if appraisers need to make $7,000 a month to survive, in Florida the most efficient way to do that is to complete 20 at $350, but in North Dakota the most efficient way to do that is to complete 10 at $700.
View attachment 93338

Is "Why are appraisal fees higher in the states with the lower demand for appraisal services, meanwhile while fees are lower in the states with higher demand?" an assumption, or is there another basis for it? I expect there is a higher volume of VA and FHA here compared to the chart I posted above. For example, if I recall correctly, I found about 20% of the sales here were VA loans recently. USDA is also a significant player, I believe.

 

[Dublin ohio]

Question: Why are appraisal fees higher in the states with the lower demand for appraisal services, meanwhile while fees are lower in the states with higher demand? As GSEs and AMCs make appraisal businesses less viable (via waivers and other policies) does that increase appraisal costs to consumers? In other words, if appraisers need to make $7,000 a month to survive, in Florida the most efficient way to do that is to complete 20 at $350, but in North Dakota the most efficient way to do that is to complete 10 at $700.
View attachment 93338

Could it be that some states have more appraiser's. In the tri county area I live in. There are over 400 residential appraisers. Area density could be another factor

 

[CGinMN]

Is "Why are appraisal fees higher in the states with the lower demand for appraisal services, meanwhile while fees are lower in the states with higher demand?" an assumption, or is there another basis for it? I expect there is a higher volume of VA and FHA here compared to the chart I posted above. For example, if I recall correctly, I found about 20% of the sales here were VA loans recently. USDA is also a significant player, I believe.

Just a general observation based on what I see on the lender side for conventional appraisals. It is probably more complex than I'm making it out to be.

That is, IMO, the entire reason for this exercise. I think a lot of folks see the refi boom of the 19-21 era as something that might happen again - even though the odds of that are literally zero. Nonetheless, machinery is in place now to ensure that doesn't happen - 'that' being the $1000 appraisals and 2 month TAT's.

If they don't want 1000 appraisals and 2-month TAT, why not short forms as a stopgap?

 

[alebrewer]

Just a general observation based on what I see on the lender side for conventional appraisals. It is probably more complex than I'm making it out to be.

If they don't want 1000 appraisals and 2-month TAT, why not short forms as a stopgap?

I mean - looking at it from a modular perspective, what 'modules' are imperative to producing credible results? The inspection module or the analysis module? The folks who control the narrative decided that the analysis module is more critical, thus the development of the hybrid model. To your point, the hybrid model - to some extent - is a reflection of the 'short form' mentality. Reallocate those time consuming modules and focus on the part that really makes an appraisal an appraisal - the analysis.

 

[djd09]

​

'that' being the $1000 appraisals and 2 month TAT's.

listen to the banksters whine...you need to wait for your number hitters

 

[CGinMN]

Could it be that some states have more appraiser's. In the tri county area I live in. There are over 400 residential appraisers. Area density could be another factor

Wouldn't more appraisers per household result in fewer appraisals per licensee, and all other factors being equal that should drive costs down? Instead, the states with the fewest appraisals per appraiser generally have higher fees.

I'm going to do some more analysis and I will post it someday.