Real estate appraisers in Massachusetts are wrestling with many lenders who prohibit the use of trainees, cutting down on the number of bodies they can put in the field, according to the Massachusetts Board of Real Estate Appraisers.
The issue with trainees is contributing to a dramatic fall in the number of appraisers in the state.
According to the organization, the number of real estate appraisers in Massachusetts fell 39% from 4,048 in February 2007 to 2,479 in February 2012. Within that decline, the number of trainees fell 81% to 308 from 1,648.
“Before, many certified appraisers might have one or more trainees out performing supervised work, now you have very few, almost none at all, trainees engaged in the process,” Stephen Sousa, MBREA executive vice president. “There are pretty severe restrictions on licensed appraisers as well, forcing many out of the profession.”
Between 2011 and 2012 the number of certified appraisers in Massachusetts fell for the first time, according to the MBREA. Sousa cites retirements and an increasing number of appraisers not finding the profession rewarding.
The fall-off in Massachusetts is noticeably steeper that what’s going on across the nation. Nationally, the number of licensed appraisers fell 12% to 86,800 in 2011 from a high of 98,450 in 2007, according to the Appraisal Subcommittee of the Federal Financial Institutions Examination Council, which has a national registry listing certified residential and certified general appraisers.
In that time, the experience level of appraisers rose, another indication that the least experienced ones are the ones leaving the field.
“It’s offset somewhat by retirements, but largely it appears to be those who got in at the market’s peak are the one’s who are leaving,” says Ken Chitester, spokesperson for the Appraisal Institute, the nation’s largest professional organization for real estate appraisers. “Some people got into the business thinking there was easy money to be made in a boom market.”
Chitester cites a repressed real estate market and competitive threats in the valuation industry such as automated valuation models and broker price opinions as other reasons for the nation’s reduction in appraisers.
Still, that doesn’t fully explain the above-average decline Massachusetts where the disappearance of trainees seems to be more of a problem. And age is beginning to take its toll as a significant number of appraisers are approaching retirement age, Sousa says. And because of licensing, replenishing the supply of appraisers is not an easy task.
“For example, if there was a surplus of appraisers in New York, they would need to obtain a Massachusetts license before they could work,” Sousa says. “For newbies, the process to move from trainees to certified is at least 24 months long, during which time the trainees have to work under the supervision of a certified appraiser"
All of this, he says, will lead to longer turnaround times and higher fees as lenders begin to offer premiums for quicker turnaround.