Posted by: JoAnn Apostol
Published: March 14, 2019
Recent surveys of appraisers indicate a steady decline in licensed appraisers. If this trend continues, the industry could lose more than 38,000 appraisers in the next 10 years. In May 2018, the Appraiser Qualifications Board (AQB) enacted changes to the experience, degree, and log-time requirements, making them less stringent. Can this halt the decline? Let’s explore this idea in more detail.
In early 2019, the number of licensed appraisers was just over 94,000. This total includes appraisers who are licensed in multiple states, so there are actually fewer than the official number indicates. Although there was a great exodus between 2006 and 2012, many appraisers came back to work once the demand returned and fees increased. However, the numbers are still expected to decrease at an alarming rate.
Although a number of trends are affecting this decrease, such as hybrid appraisals, valuation technology, and stagnant customary and reasonable fees, a recent survey reveals the critical factor. Nearly 77% of those surveyed by Valuation Review did not have an appraisal trainee and didn’t plan on training anyone.
This is a concern when you consider the fact that an Appraisal Institute Study in 2017 reported that 49% of appraisers nationwide are between the ages of 51 and 65, and the average age is 55. In addition, nearly 41% of appraisers surveyed by the National Association of Appraisers (NAA) responded that they planned to retire in the next 10 years. Think of the important knowledge and experience that will leave the profession when they do. The same NAA survey showed that almost 75% of appraisers have 11 to 30 years of experience in the industry.
When asked why they didn’t have trainees, the survey respondents cited four main reasons. These were lack of funding, lack of time, lenders who won’t accept the work of trainees, and states that automatically audit the appraisals done by trainees. As a result, meeting the trainee requirements is a big hurdle for entrance into the industry.
In 2018, the AQB approved changes to the experience hours, degree, and log time requirements for licenses, and these changes went into effect in May of that year. Here’s a brief overview:
These changes came after a very long exposure time with record responses and comments from the public on the topic. To get the proposed changes approved, the AQB removed the alternate experience track. The goal was to enable people to get their license and enter the profession more quickly than in the past, although that would only be possible if states agreed to adopt the new requirements. The AQB publishes the minimum requirements; therefore, states can require more.
The AQB reports that in the past year, there has been a significant percentage increase in the number of first-time test takers for both the licensed residential license and the certified residential license. They believe the new requirements might have contributed to the uptick. However, they are cautious because they have not been adopted in all states.
Florida, Illinois, Indiana, Kansas, Louisiana, Maine, and New York are among those that have not adopted the reduced requirements. However, Alabama, Arizona, Colorado, Connecticut, Hawaii, Iowa, Idaho, Ohio, Pennsylvania, and Texas did. Some states did not adopt all the changes. California, Delaware, Georgia, North Carolina, and Oregon only adopted the degree requirement changes.
It is likely that the number of candidates interested in earning appraisal licenses will increase in the states that approved parts or all of the minimum requirements. It is also possible that more states will adopt the requirements as time passes; for example, Alabama just recently adopted them. Therefore, we always advise anyone who would like to earn a licensed residential or certified residential license to check with their state appraisal boards to see the respective criteria.
Although the requirements are lower in some states to gain a license, finding a supervisory appraiser to get the training needed to become a licensed appraiser is still difficult. So, the AQB is studying alternative options for the supervisor/trainee model. They are aware of what the surveyed appraisers told Valuation Review and NAA, and they have heard the complaints of trainees who have not been able to find a licensed appraiser willing to supervise them.
According to AQB, the program they are considering is called Practical Applications of Real Estate Appraisal. It would use simulated training modules designed to satisfy a portion of the experience requirement for the licensed residential and certified residential classifications. This use of technology could interest young people in pursuing the license while bringing modernization to the profession. The AQB is working on the logistics of the program, and then there will be a period of significant input, exposure, and deliberation before it is offered.
If you live in a state that has adopted all or part of the AQB requirements, now is a great time to become a real estate appraiser. But, no matter what state you’re in, Kaplan offers appraisal licensing education packages that can help you prepare for a rewarding appraisal career. Learn more by visiting our appraisal education page and choosing your state.