Wednesday, 18 May 2022 | The Latest Buzz for the Appraisal Industry

Race and the Property Valuation Industry

Many of you reading this are probably familiar with this case that recently went viral. A husband and wife requested a bank appraisal to refinance their Jacksonville, Florida home. The wife is African American, and her husband is white. Only the wife was at home to greet the appraiser when they arrived to inspect her home. When the couple received the final appraisal report of their home’s value, they were shocked! The couple could not believe that their home’s value was so low, and they instantly felt that the wife’s race played a role in the outcome. After getting over the initial shock and anger, the couple requested a new appraisal of their home. However, when  the new appraiser arrived at their home, only the white husband was there to greet the appraiser; also, the couple had removed family photos and all other evidence that an African American resided at the residence. The second appraisal indicated a $100,000 increase in their home’s value when compared to the first appraisal report.

Further reasoning might suggest that there could be alternative explanations for the $100,000 variance between the two appraisal reports, explanations that have nothing to do with the wife’s race. The first appraiser could have been incompetent, resulting in a lower value estimate for the couple’s property. The second appraiser could also have been incompetent, resulting in an over valuation of the couple’s property. The first appraisal report could have in fact been accurate, and the homeowner’s opinion of their home’s value could have been aggressive. These are all potentially logical conclusions; however, logic doesn’t go viral, doesn’t move people – emotions do. Let’s unpack this situation…

Beyond the Headlines: Residential Appraisal Review

The property valuation industry has a system for dealing with situations where a home’s appraised value is in dispute; it’s called the review process. In this process, contested appraisal reports are reviewed by an experienced review appraiser, often overseen by an appraisal manager. Appraisers who complete reports do so with the understanding that their work could and would be reviewed if a homeowner, as in this case, accuses the appraiser of being racially biased in their value estimation. This standard review process inherently reduces the likelihood that an intentional bias will significantly impact the values of appraisal reports.

However, the husband and wife in this article are not valuation professionals. They are neither aware of nor concerned with the nuances of the review process previously mentioned; they are homeowners who engaged the services of a financial institution. To add to the emotional angst, an interracial couple’s African American wife felt that it was because of her race that their home’s value estimate was so low. By requesting a second appraisal report, removing race from the equation, and subsequently receiving a higher value estimate for their home, in her mind, the wife’s suspicion was validated. If reasoning could interject alternative explanations (other than race) for the couple’s home value to be appraised significantly lower than the homeowner’s expectations, why did the wife instantly point to her race as being the culprit? The answer…


First, a little bit about history. The term “redlining” comes from the development by the New Deal by the federal government of maps of every major metropolitan area in the country. Those maps were color-coded first by the Homeowners Loan Corp, and then the Federal Housing Administration (FHA), and adopted by the Veterans Administration. These color codes were designed to indicate where it was safe to insure mortgages. Anywhere African Americans lived or lived nearby, were colored red to indicate that these neighborhoods were too risky to insure mortgages.1

During this era, appraisers utilized comments regarding race that directly impacted home value estimates. Comments made by appraisers such as “Colored infiltration a definitely adverse influence on neighborhood desirability,” were common practice during this era. The FHA manual of this time also detailed segregationist policies stating, “incompatible racial groups should not be permitted to live in the same communities.”1 These policies led to white families having the ability  to take advantage of the federally subsidized housing in newly built suburbs with a government- insured mortgage, and African American families being systematically shut out. The inability to build wealth through home equity has been the primary contributor to the wealth gap in our country, with African American wealth being around 5% of white wealth (vs. an income gap of 60%).1

So, an African American homeowner, who is in an interracial relationship with a white man, has her house appraised by a white appraiser (assumed) and receives a far lower valuation than expected. To develop further context, we know that she is an educated lawyer (who undoubtedly knows her history), and has been living life in America as a black woman. As we contemplate the history of discrimination against African Americans, such as redlining, etc., it becomes abundantly clear why the homeowner would instantly assume that her race factored into the lowered appraisal value estimate of her home. But, what else played a role?


Given that the race of the appraiser in the article was assumed and not specifically mentioned, what is the likelihood that the appraiser in the article was black? What is the likelihood that the appraisal reviewers or appraisal managers, if called on to intervene in the value dispute, were black? To examine these questions, I’ll need to tell you just a little bit about my experience and perception along my journey in the property valuation industry.

My Journey

I’m an African American male with an MBA degree, concentrating in Real Estate and Urban Affairs. I’m also a Certified Residential Appraiser. My first real estate job as a staff appraiser was  with a firm that was a precursor to the modern-day Appraisal Management Company. The company employed twelve staff residential appraisers. I was the only African American appraiser.

I was assigned to appraise properties in the predominantly black areas of Atlanta, GA. When I showed up at a homeowner’s residence, the first reaction was joyful shock that a black appraiser was appraising their home. For most of these black homeowners, I was the first African  American real estate appraiser that they had ever encountered, and they told me so. What I also  remember from those conversations and interactions with those black homeowners was the relief  expressed on their faces, the pride felt in their voices, those unsaid, silently felt assurances that they felt that they would be treated fairly in this process.

In my next staff appraiser job, I worked for a major financial institution, first as a Staff and Senior  Staff Review Appraiser, and later as a Collateral Services Manager. While at this financial institution, all the bank’s appraisal managers were required to attend a meeting held in Seattle, Washington. As we gathered, I looked around, hoping to glance someone, anyone who looked like me. As I mingled and observed, “the only one” syndrome was reflected here as well. I was the only African American Appraisal Manager in the entire country for this major financial institution. But, why?

Diversity Hindered by Industry Structure

The structure of the property valuation industry is an impediment to creating equal opportunity for diversity in its ranks. To obtain a residential appraisal license, in addition to meeting the education requirements, etc., an appraiser trainee must be mentored and trained by an experienced licensed or certified real estate appraiser. The real estate appraisal industry is fragmented, dominated by relatively small residential appraisal firms. The fragmented nature of the industry is what gave rise to Appraisal Management Companies that function as “management middlemen” between residential appraisers and financial institutions needing appraisal services.

Most fee appraiser shops are relatively small, white owned, and typically train people who are known in some capacity by the business owners. As these large financial institutions seek to employ staff appraisers, review appraisers, and appraisal managers internally, they look within their companies, which typically reflect the market’s lack of diversity. Alternatively, they may look  directly to the market to fulfill their hiring needs, which serves the large financial institutions up a  mixture of potential employees who are void of diversity. This market structure assures that a lack of diversity as it relates to African American staff appraisers, review appraisers, and appraisal  managers is the norm because the structure hinders or limits equal opportunity for diverse appraisal trainees to enter the field and transition to other jobs such as staff appraisers, review appraisers, and appraisal managers.


The story associated with the interracial couple was included in print and digital newspapers, blogs, and articles throughout the country. It was also posted on social media where it went viral,  being seen by millions of people. The reputations of financial institutions involved in these type situations can be negatively impacted, not necessarily by the logic or facts associated with such cases, but by people’s emotions – the way people feel when things go awry. And often, people feel this way because they never see anyone who looks like them providing these services to them. History, perception, and the lack of diversity in the current environment drive this feeling. No amount of logic will change that.

I’m reminded of something Lester Owens said during a town hall meeting. He said, “Once you understand that there’s an issue, you can always solve the problem.” Well, there’s an issue.


1. NPR– A ‘Forgotten History’ Of How The U.S. Government Segregated America

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  1. So this is the 3rd time I have heard this exact same story, almost word for word including in all cases receiving a $100,000 increase in the 2nd appraisal. The only thing changed is the city (Jacksonville, Indianapolis, New York). Kind of crazy to have 3 cases where the exact and I mean exact same thing happened in all cases in different parts of the country. Black lady meets the appraiser, receives a “low” appraisal, another appraisal is ordered and after removing all “black” items from the home the appraiser is met by the husband (white) and receives a $100,000 value increase.

    Another point is this, “redlining” and The National Housing act was 87 years ago, no one currently in this industry was selling real estate, providing home mortgages or doing appraisals then.

    1. Brent, you may be right about the National Housing Act being implemented 87 years ago, but redlining was active in the 1940s, 50s and 60s up until the 1964 Civil Rights Act and later legislation outlawed it. So it is still in the actual and cultural memory of many Black homeowners.

  2. This is a repetitive hypothetical story. I don’t see merits in a fake story. As far as I am concerned, as an appraiser I am giving an opinion of value of an asset. The ethic rule cover the bias topic and all appraisers are well aware of that. Have the appraisal in question been reviewed by an impartial entity, such an appraisal organization like the AI, ASA? Has the appraisal been submitted to an appraisal board to perform an objective review? Or are we only talking a “hear say” made-up story?
    To me I can see people that see everything to the racial lens and all that happens around them is due to a racial bias. I don’t appreciate fake or one sided stories. Do you know it those appraisers were given the opportunity to defend their positions? I see appraisals every day that I don’t agree with. Does that make it bias particularly because of race? Or it is me that see race everywhere I go? I give no relevance to this story. Bring the appraisals and lets review it. I’m sure all are kept hypothetical for a reason. Again, somebody following a narrative of division! Please, keep politics outside my profession!

  3. I have created an account only to beg that you Please stop publishing this race in the industry BS. For the love of God, please stop gas lighting us all. We have laws for this. If the appraiser did wrong, put him in front of the board and let them determine it. This is destructive no constructive. We are going to beat this horse until we all see each other as suspect, are more virtuous than the next person and want to fight everyone. Please find a new passion and hobby. This is cancerous. – P.S. I am a black appraiser 18years experience and can’t take anymore of these articles.

  4. This is a repetitive hypothetical story. I don’t see merits in a fake story. As far as I am concerned, as an appraiser I am giving an opinion of value of an asset. The ethic rule cover the bias topic and all appraisers are well aware of that. Have the appraisal in question been reviewed by an impartial entity, such an appraisal organization like the AI, ASA? Has the appraisal been submitted to an appraisal board to perform an objective review? Or are we only talking a “hear say” made-up story?
    I know people that see everything through the racial lens and all that happens around them is due to a racial bias. I don’t appreciate fake or one sided stories. Do you know if those appraisers were given the opportunity to defend their positions? I see appraisals every day that I don’t agree with. Does that make it bias particularly because of race? Or it is me that see race everywhere I go? I give no relevance to this story. Bring the appraisals and lets review it. I’m sure all are kept hypothetical for a reason. Again, somebody following a narrative of division! Please, keep politics outside my profession!

  5. Why is it, that these stories NEVER include any follow up of the actual numbers behind the truth of the valuations. Perceptions without facts are not very meaningful. This story would only have impact if there actually was some sort of bias. Give us the real value of their house, only then can we evaluate what is actually happening within the valuation community. Anything else is just more race baiting and stirring the pot, looking for a problem that may not even exist.

  6. This “fake story” is irrelevant and shows no real facts. Talking about a gossip assuming it is racial bias really shows me who the racist is. Let us get the appraisals, let us review them, and let us find out what the problem is. I will suggest the real racists to move-on in life, put your hate aside, stop seen phantoms were there are none and stop bringing this type of BS to our profession.

  7. I have seen 3 distinctive similar stories relatively recently, with very similar outcomes. I was able to find the Subject Property in one of these stories. And, since I have access to some sales data for that area, I did my own quick and dirty evaluation. My opinion: the wide spread in Appraisal estimates for this property ($500k, per news story), was most likely due to competency, since this area appeared to be heterogeneous, with multiple submarkets (including properties with bay/ocean views), and highly fluctuating prices/values.

    1. Very interesting! The correct way to address this issue is to take the claim to the board. This has turned into something that it is not. The author of this story is supposed to be an appraiser but does not behave like one. Sharing gossip without the basic facts. It tells a lot about his professionalism. I have never cared about the color of skin of those that own a property. I am certain that 99.9999999% of my peers feel the same. To have some mediocre people creating an issue were there is none, just to follow a political narrative is disgusting and unethical, to say the least!

    2. I can see racism in this letter. People that believe that an appraiser will do a better/fair job because of their skin color? How does skin color relate to better results, or a fair result, or a competent result? I am starting to see the origin of the problem here. The real problem is in those who feel different. I am a minority and I see everyone as “Human Race” not black or white. Those claiming racial problems should start by eliminating the hate and division from their hearts. Only then they could start improving. The hate is blocking your freedom. I do not go to meetings to look for skin color. I go to meetings to learn and meet other professional peers. I want to develop positive business relationships with peers of all races.

  8. I believe this is a true story in that I heard it twice, on two different shows, on NPR and it included the woman purported to be the wife. I also believe that redlining still happens, based on reports of minority borrowers being steered into subprime loans with higher rates in the 2000’s. However, in the two different reports I heard, the stories were “oh my goodness, there are racist appraisers!”. The story was reported as one appraiser met the Black woman and came in low and a different appraiser met the white man and came in $100,000 higher. As usual, the lower number is assumed to be the one that is incorrect, but leaving that aside, if there’s a $100,000 difference and this is not a $1,000,000+ house, one or both of these appraisers is completely inept or unfamiliar with that market. Both of these stories ended with the implication that this one story and its anecdotal evidence is proof of racism among appraisers. There was no commentary from anyone representing appraisers, there was no consideration that the lower appraisal may actually have been the correct number. There should have been, at a minimum, a third appraiser included in this story who had looked at both of these appraisals and commented on them.

  9. Something fishy is going on. The race-hustlers have targeted the real estate industry including appraisals as one of their next industries to attack. Very recently I have started seeing similar stories attacking “racist medicine”, whatever that is. This follows all the stories, lacking support, of “racist police departments”. You see the trend. It is all tied to Marxist politics, Critical Race Theory, BLM, etc.

    So let me get this straight. In an industry (real estate) with millions of transactions every year, all it takes is one well publicized, fluffy news story with lots of unanswered questions, to push the industry back on its heels in self flagellation? The Appraisal Institute’s past and current Presidents couldn’t line up fast enough to condemn their own constituents. By the way, the AI’s national leadership should resign or be forced out in shame as they are completely unprepared for this situation.

    The point is that we are a data driven industry. If there is a “racist appraiser” on the loose, let’s see the appraisal and the data. It would be a great case study for the USPAP and Ethics courses. At the very least this convenient little story should be vetted by qualified appraisers before we all drink the Kool Aid. And another thing worth considering is that one rumored story about a bad appraisal should not offset the other millions of competent transactions that occurred last year. Talk about throwing out the baby with the bath water!

    Also, let’s get some information about the people making the complaint about the “racist appraisal”. Could the complaining party have political or activist ties or connections? Could they stand to profit from making such allegations? Do they have racist views themselves? For example, it would make a difference if discovered that Al Sharpton and Louis Farrakhan were the ones complaining about appraisals.

  10. In more recent history an appraisal trade association was sued and lost a case where their textbook says that appraisers are to select comparable sales with similar demographics. I know I was taught that. Folks, we need to rethink things . That is not in any way a commentary on any of these cases as to correlation or not. Without seeing all appraisals I just cant comment.

    1. Joan, so why publish this crap if it is unsupported? I’m recently retired appraiser with 41 years in the trenches. The racism discussed in this article has never been part of my experience. All the whining about a lack of racial diversity in profession on this site, with the Appraisal Foundation and with AI needs to stop. Opportunities abound for those with motivation and persistence. However, I will say that after reading Mr. Lewis’s piece, I was able to ride the year’s best time on my daily 10+ mile bicycle trek. Thanks Mr. Lewis.

    2. You were taught similar demographics? I’ve been appraising for 30 years and never heard any educational book or instructor teach this. It was always presented as the opposite as a complete NO NO.

      1. I have been appraising for almost 60 years and unfortunately I do remember an early edition of the Appraisal of Real Estate reciting an “example” of Economic Obsolescence that doesn’t comport with your recollection. As best I can recall the language: “An example of Economic Obsolescence is the infiltration of inharmonious racial groups” was in my early appraisal text. This was the substance of a Federal lawsuit against the American Institute of Real Estate Appraisers and resulted–among other things–the publication of an updated edition of the Appraisal of Real Estate, removing this example of alleged Economic Obsolescence. It is too often forgotten that appraisers do not determine, make, or influence value, no matter what others may believe. Competent appraisers use locally proximate and similarly constructed and maintained residential comparables to assist them in REPORTING market value. It is difficult to believe that with the data available to appraisers today, and the lack of information concerning race, ethnocentric, religious, or other characteristics of an owner or prospective purchaser in MLS and other sources of data, that personal prejudice of an appraiser may have–should be detected in a competently performed appraisal.

    3. Interesting, obviously demographics are relevant for certain industries, such as retail, car wash, gas stations, c-stores, office, among others. Those are facts. Now, when it comes to residential, the most similar, the closest, the most recent, similar size, typical buyer (end-user, investor, speculator, etc) are relevant characteristics. I’d like to hear more about that law suit, it is the first time that I hear that story.

    4. We don’t need to rethink things. This is a made up issue. I’m not sure if you have paid attention to the big bold print at the top of the neighborhood section on page one of the report where it clearly says: Race and the racial composition of the neighborhood are not appraisal factors. I believe I heard you say in a prior video talking about this ridiculous issue that in the past you would typically go to another predominately black neighborhood for comps. I about fell off my chair!

  11. Since Appraisal Buzz won’t approve my comments, I’ll try again.

    “the husband and wife in this article are not valuation professionals.” Really? The author knows nothing about Abena Horton and blindly makes this claim. She’s the VP of a company, Black Knight, that makes money on home values generated by computers and not human appraisers. She is on record bashing the appraisal industry before she made this claim. It is amazing It has been eight months and she has yet to file a complaint with the state board or file a lawsuit. Not one sight of the two appraisals. The only thing she has done in eight months was create a new webpage so you can book her to be a speaker at an event. Money stunt. So please STOP IT WITH THIS STORY!

    google Abena Horton
    check out “Why is only one side being told” on the ApprisersBlogs website.

  12. Looks like there is more to this story than meets the eye. The woman claiming she had a racist appraisal done actually works for an AVM company. The parties involved have a vested interest in this story going viral. AVM companies will use these “incidents” to convince the public that the appraisal industry is racist and so we must switch to an AVM system. Wow. Sell that Narrative, honey.

  13. The lady in the story is an attorney and VP at an AVM company: Black Knight Inc. is the company name. The complaint should have presented to the appraisal board. There is no reliability in this story. It is pathetic to see “appraisal” organizations sharing this type of BS. The author of this story should feel ashamed. I wonder is he is the racist.

  14. In the time when if you’re a hammer everything is A nail the stories get perpetuated.
    -Writer was one of 12 appraisers, it seems to be demographically close to the population. Other than white folk own most appraisal business what is the opposition to entry? Other than it must be systemic Racism. Maybe if you show up with an attitude of a victim people maybe hesitant to hire anticipating a lawsuit.
    -The complaint is a lady Atty that works for a company promoting computer generated competition to conventional appraisers. She has expressed her opinions against them repeatedly.
    -She refuses to file an official complaint where the appraisals can be reviewed.
    Please stop the racial BS.
    I’ve been appraising for 40 years and I’ve never seen it. I’ve never heard anyone speak derogatory towards any minority trying to enter the profession or as a factor in valuation.
    STOP the divisive BS.
    Rumor based journalism is not journalism. Get a backbone and get the facts.

  15. Mention race and everyone blows a gasket! The article is less about race and more about perception. It’s less about the “facts” of the case, and more about the “emotion” associated with each case. Most of your comments are reacting to “race” and missing the entire point of the article. But…oh well. Have at it.


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