In 2022, all the major appraiser conferences included “trainee days” featuring reduced registration fees for trainees, job fairs, and opportunities for mingling between veteran appraisers and people just starting out in the profession. This trend is a big step forward for bringing new entrants into the appraisal field – which leads to the question: how is the appraiser workforce evolving, and what are the next steps forward? As we exit the holiday season and enter a new year, the “spirits” of the appraiser workforce past, present, and future guide us through a review of the state of the industry.
Spirit of the past
The facts are so well known in the industry that it hardly even needs to be said: the appraiser workforce is aging and lacks diversity, while barriers to entry have stymied progress. So many appraisers who overcame those barriers share the same story: unless they were joining family members in the business, they struggled to get a supervisory appraiser to take them on.
In the face of those sobering facts, the Appraiser Diversity Initiative™ (ADI)* was launched in 2018, led by the National Urban League. Fannie Mae, the Appraisal Institute, and Freddie Mac have joined ADI and other efforts to foster change, which have slowly gained traction, leading to the current state.
Spirit of the present
At the Appraiser’s Conference and Trade Show (ACTS) in April 2022, one leader of the National Association of Appraisers said it was the most diverse appraiser conference he had ever attended. Diversity was also noticeable at the fall conferences – Valuation Expo and the Appraisal Summit.
Last year was a year of momentum, with appraisers embracing the need for more diversity and welcoming new entrants to the field with visible support for trainees. Appraisal management companies (AMCs), other industry service providers, and individual appraisers donated their time and other resources to support aspiring appraisers through ADI, serving as advisors, sponsoring workshops, and becoming supervisory appraisers.
The mortgage industry – which relies on residential appraisers – also stepped up. JPMorgan Chase & Co, for example, committed $3 million over three years to the ADI scholarship fund, which is managed and partially funded by the Appraisal Institute.
ADI awarded 330 scholarships in 2022, and by the end of the year more than 50 winners had completed their education. A number of the newly minted trainees are now working in the industry, hired by AMCs, mortgage lenders, and other companies. Dozens of appraisers are volunteering their time to advise scholarship winners, providing guidance and encouragement to help them through their educational requirements. ADI scholarship winners also receive books, calculators, and one paid professional conference registration – which facilitated the all-important interactions between aspiring and experienced appraisers that energized the 2022 events.
Spirit of the future
Conference sponsors are planning trainee days again in 2023, ADI is working with more potential donors, and many other industry participants are stepping up to be part of the momentum. But there are plenty of tasks to tackle in 2023 and beyond.
According to The Appraisal Foundation, Practical Applications of Real Estate Appraisal (PAREA) “provides an alternative to the traditional supervisor/trainee model for gaining appraisal experience. PAREA provides another pathway for aspiring appraisers to fulfill their experience requirements by taking advantage of innovative technology.” PAREA has promise, but right now there remains a need for supervisory appraisers – a number of ADI scholarship winners across the country have completed or are nearing completion of their education and are looking to be matched with supervisors.
Even when trainees are matched with supervisors, there are still a noticeable barrier to getting the required practical experience. Many lenders/users of appraisals have layered requirements that limit an appraiser trainee from providing significant contribution in the development of the appraisal report, inspecting the property and comparables without a supervisor present, and signing as trainee on left-hand side of the appraisal report. Most states allow appraiser trainees to inspect and sign the report, when legally qualified. And longstanding Fannie Mae policy allows, and even encourages, trainee participation. Yet, there is often skepticism about the quality of trainee-produced appraisals.
Fannie Mae analysis shows the quality of appraisals completed by trainees to be as good as or better than those completed by non-trainees. While the sample size was small, this view is enlightening. Could it be that two pairs of eyes are better than one? Appraiser trainees are still learning but that also means they are likely to take their time and be meticulous in their work, and their supervisors have every incentive to carefully check the trainee’s work.
With ADI gaining traction, the agenda for 2023 includes further expansion to attract and support even more aspiring appraisers. To continue its growth, ADI needs more sponsors, advisors, employers, and supervisors.
As we begin the new year, Fannie Mae salutes all of those in the appraisal industry that have contributed to bringing new and more diverse entrants in the field, and are working to overcome remaining barriers to entry. And above all we celebrate and appraiser trainees like Jessica Brown and Marcus Knight for they embody the spirit of the future appraisal workforce.