The appraisal industry’s lack of diversity — in terms of age, gender and ethnicity — and the growing number of appraisers exiting the profession as they reach retirement age have been well-documented issues. But now that the industry is keenly aware of these problems, what can be done to turn awareness into action to effect positive change for the next generation of appraisers? Before we dissect this question, let’s revisit the numbers.
The current state
Data from the Appraisal Institute reveals there are around 78,000 active real estate appraisers in the U.S. On the surface, this may seem like a robust number, but when you take into consideration that this number has been dwindling at a rate of 2.6% for the last five years, the reality of the issue sets in deeper.
In terms of age and ethnic diversity, there is also room for improvement. Since 50% of active appraisers are between the ages of 51-65, most are nearing retirement. Most appraisers are also white males (77% male, 85% white).
How exactly did we get here? The adage “you can’t be what you can’t see” certainly applies and lack of general awareness of an appraisal career, and all it has to offer, is something that has been pointed to time and time again. For example, an appraisal career is typically “the family business.”
Young entrants into the field often have family members and mentors who they can turn to for advice as they consider if an appraisal career is right for them. Alternatively, for those who do not have a blueprint to follow, it is much more difficult for this career path to be viable or for it to be on the radar. This has led to a “sea of sameness” in the industry. Considering the growing need to fill the appraiser talent pipeline, this presents an excellent opportunity for young, diverse entrants to enter the profession, specifically some of the communities hit hardest by pandemic job loss.
Women, Black, Indigenous, People of Color (BIPOC) and younger workers were disproportionately impacted by job loss and job insecurity due to COVID-19. According to McKinsey & Company data, women left the workforce at higher rates than their male counterparts since the start of the pandemic (56%), despite making up just 48% of the workforce; Black and Hispanic workers faced 1.6 to 2.0 times the unemployment rates of their white counterparts; and 27% of people aged 18 to 24 faced unemployment as they sought out work in a shaky economy.
What’s more, as the economy begins to rebound, these impacted groups are likely to trail recovery by 18 to 24 months compared to their counterparts. And while unemployment and job security presented a major threat to the economy, another emerging trend has been disrupting the American workforce — “The Great Re-evaluation.” The pandemic was a catalyst for millions of Americans to re-evaluate their career paths and what’s important to them in terms of work/life balance. Many employers are feeling the effects of a mass talent exodus that has ensued over the last few months as employees seek out new opportunities that offer greater flexibility.
These challenges, while daunting, present a unique opportunity for the appraisal industry to be a part of the solution. An appraisal career, by design, checks off several career wish list items for many job seekers today — flexibility, stability and high earning potential are all hallmarks of an appraisal career. Additionally, as the industry sets its sights on appraisal modernization and hybrid appraisals become more commonplace, digital natives’ millennials and Gen Z have the opportunity to carve out their own niche in the industry as new valuation technology comes into play.
There is only one way to eat an elephant…one bite at a time
It will take the industry’s collective commitment to attract and retain young people and diverse talent to the appraisal field. While there is no silver bullet to achieve this, the industry is making strides. For example, The Appraisal Institute has several initiatives and scholarship opportunities designed to foster diversity and inclusion in the profession.
To name a few, the Appraiser Diversity Initiative with Fannie Mae and the National Urban League was designed to attract new, diverse talent to the appraisal field while helping to overcome barriers to entry. The Appraisal Institute Education and Relief Foundation Minorities and Women Education Scholarship and AI Course Scholarship help defray costs, and participation in CareersBuildingCommunities.org, a resource for high-school and college-aged individuals to explore various career paths in the real estate sector, including appraisal, also helps.
While these initiatives are commendable, there is still more work to be done if we hope to attract the next generation of appraisers, who have high expectations for what they want from a career.
It’s time we amplify all the benefits of an appraisal career to a new generation of diverse entrants so it is no longer the “best kept secret” in the housing industry. But how? Concerted efforts, big and small, can make a difference.
Appraisers, AMCs and corporations who employ appraisers can:
- Conduct outreach to local high schools and colleges. Offer to speak to classes or set up a table at a career fair to spread the word about the many benefits of an appraisal career (of which, there are many).
- Bolster digital efforts to reach young people where they are. Be a source of education to help new entrants navigate the complexities of entering the field. Host a Q&A session over Facebook live, do a video content series featuring appraisers’ perspectives and insights, host a webinar to provide education to the next generation, offering tips and tricks for breaking into the industry, etc.
- Step up to the plate. Open your arms to appraiser trainees. Create internships and opportunities for young people to complete some of their appraiser trainee coursework before they’re ready to enter the field to help set them on an early path of success. Additionally, consider creating scholarships within your organization for appraiser trainees to help defray costs.
- Double down on D&I efforts, but don’t do it in a vacuum. Consult with appraisers and trade groups who are a part of and directly serve the diverse communities you wish to reach. This will help you can gain a deeper understanding of what is important to these demographics in terms of career path, flexibility, etc.
- Be an ally. Be passionate and vocal about increasing diversity in the appraisal field. Provide mentorship to new entrants, BIPOC and women, who often face more hurdles entering the field than their counterparts (those with family mentors to turn to, or others who look like them).
This article was first featured in the Oct/Nov HousingWire Magazine issue. To read the full issue, go here.