The Aging Appraiser
Questions dealing with age and retirement…
There is a lot of apprehension in the appraisal industry regarding from where the next generation of appraisers will come. There are not a lot of new people entering the profession at this time. To try to get a better idea of appraiser demographics, we asked a couple of questions dealing with age and retirement. First, we asked, “What is your age range?” This was a very popular poll with a near record of 6,885 responses. No big surprise that the most popular answer was 51-60 with 33% of the vote. This was followed closely by 41-50 with just more than 30%. The 61-70 group at 16% is even slightly larger than the 31-40 group with 15%. Only a very small 2% of appraisers are 21-30 years old. So, in total, 83% of appraisers are over 41, while only 17% are 40 or younger.
The bulk of appraisers falling into the higher age brackets prompted a question to determine how much longer they plan to work. We asked, “I plan to retire or leave the appraisal business within the next…” This poll was also very popular with a total of 6,052 responses. The answer is a bit startling for the profession. Almost 22% of you plan to retire in the next five years with an additional 17% planning to leave within the next 10 years. In total, nearly 40% of appraisers plan to leave in the next 10 years. Keep in mind that an additional 16% said they are not sure when they plan to leave. So if a majority of the “undecided” group decides to leave, we could potentially lose half of the licensed and certified appraisers in the next 10 years. This profession has a reasonably long education and training curve. Based on these polls, the industry needs to do something sooner rather than later to encourage people to enter the profession. With licensing and certification requirements becoming increasingly strict and the economic environment for appraisers remaining poor, encouraging new people to join the profession will be a difficult task.
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We all know “the future of appraising”…it’s called AVM.
Think about it appraisers. By 2010 over 70% of all equity trades on Wall Street were made by *HFT (High Frequency Trading) computers. That number is likely around 85% today. If they can trust computers to trade equities and make a killing don’t you think they can trust them for something as simple as valuing a house? LOL
Oh but every house is different you say. They already had a mountain of data built up over the years for AVMs to use but it was coming in faster they could compile the data. ENTER THE UAD: A far faster way to compile AVM data.
Everything is in place appraisers for the Great Cook Off. What’s on the menu? You are (the appraiser). PVA now have great data in most areas. MLS data is plentiful, and data is flowing out of every orifice of AVM owners. Anyone can (and will) measure a house for $50. Many will even report it’s condition for the same $50.
Bottom Line: If you truly know how to read you saw the writing on the wall long ago. The sign reads: DEAD END.
*For those of you who may be interested; beating Wall Street’s HFT’s is still possible with biotech stocks. Understand the stock, study how hedge funds tank stocks that they want to buy into, and you can blow away HFT machines (we’re talking 100% to 1,000% gains)…not 3%.
For those of you who crow “But AVMs are only allowed to be used on a select few properties:
You failed to understand the long term purpose of HVCC & HVCC 2.0 (Dodd Frank).
Most recognize the short term goals:
1. Enrich AMC owning banks by billions
2. Get Andrew Cuoo elected as NY governor via huge bank contributions.
The long term goal was much more subtle:
1. Reduce the appraiser’s fee enough to cut off new blood flow.
Appraisers helped considerably by raising their own education entry standard (the joke was on you…again).
2. Wait for an appraiser shortage to develop.
3. Launch campaign to increase the role of AVMs (in light of the severe appraiser shortage).
4. Create buzz about AVMs becoming the norm.
5. Weed out the remaining appraiser holdouts or use them (along with Realtors) to do $50 condition assessments.
Behold…THE FUTURE OF APPRAISING!
Sure retired, they’re looking into that. Lenders seek to maintain control of price and value and sales functions. Their dream is one stop internet shopping and home purchase within a week, with highly reduced representative and checks and balances procedures to follow. However, if computers could have captured the human process, they would have already. The computers fail to understand the various values in use, value in feelings, value in perception, etc. Reminds me of that old appraisal picture joke; The biased eye; How you see the home, how the seller sees the home, how the lender sees the home, the tax assessor, the appraiser. In terms of AVM the biased viewing of the home will be from the lenders point of view, considering sales profit above all else. So don’t be too disheartened by the AVM. Luckily, there is still a consumer base out here like me, who were not enraptured with digital technology and clever repackaging of existing digital potential. There is always someone behind the computer system so a wise consumer never places their faith completely in an automated result, unless they like to be steered like a cattle. A wise consumer understands the checks and balances necessary are not obtained by a proprietarily controlled automated system./// Back to the topic though; I just had a clever quip about these retiring appraisers and that relationship to fees. You know these guys are counting on social security, which is one thing us younger people are not counting on. It’s highly unlikely that social security will provide me any padding 20 years from now. So one speculates that appraisal fees are not just primed to double or triple, but go much higher than that. Analysis pointing to fee relationships with brokers and appraisers state that appraisers fees should be $1,200 per order to equate to the same pay benefit as brokers and Realtors, as appraisers once enjoyed. That’s the hard soft costs argument. I for one would like to see all costs become hard costs, so consumers had to pay for services. All sold amounts on county records should only reflect net to seller, and nothing else. Anyways, this industry needs so much reform, I guarantee you one thing, a computer and a politician will be unable to complete the task as necessary. Consumer anxt will continue and no amount of legal shenanigan will ever replace the good old fashioned honest guy checks and balances system. A wise man knows who to trust, and who not to trust. Follow the money.
Censored my post – FAIL
Sorry, technical issue there. Not censored. Disregard post #4, thank you. Me and site administrator sorted this technical issue out.
HFT is becoming increasing scrutinized by the SEC and we all know it is a crocked business. I think the consumer resistance to this type of value will be high. If statistics and mathematics were so accurate, how come mathematicians dont rule the world?
all i can about the article is – DUH. do ya think?
but here is the punchline – even with that speeding truck about to hit all of us squarely in the face, tomorrow we will find out someone has found a way to make it even harder to get into this profession, and has found a way to turn everyone off even more.