Real Estate Appraisers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 13,000 real estate appraisers in the US estimate the fair market value of land and buildings, typically before properties are sold, mortgaged, taxed, insured, or developed. Large firms may offer related services, such as information or closing services. Independent appraisers may serve as expert witnesses.
Vulnerability to Trends in Housing Market
A key driver of financial performance in the real estate appraisal industry is the US housing market, which is sensitive to changes in economic conditions.
Competition from Alternative Valuation Models
Alternative valuation models (AVM), which are computerized models used by mortgage originators and secondary market issuers to determine property value, pose a significant threat to real estate appraisers.
Industry size & Structure
The average real estate appraiser employs 2-3 workers and generates about $638,000 annually.
- The real estate appraisal industry consists of about 13,000 firms that employ 36,000 workers and generate $8.3 billion annually.
- The industry is fragmented; the top 50 companies account for 40% of industry revenue.
- About 39% of establishments generate between $100,000 and $249,999 annually; 23% generate less than $100,000 annually; and 20% generate between $250,000 and $499,999 annually.
- Large appraisal management companies (AMC) include CoreLogic, Solidifi, and TSI Appraisal.
- Nearly 42% of appraisers are employees within a firm and 46% are sole proprietors without employees, according to the Appraisal Institute.
Industry Forecast
Real Estate Appraisers Industry Growth
Recent Developments
Jan 17, 2025 - Insurance Rates, Property Taxes Push up Homeowner Costs
- Many US homeowners are seeing their housing costs spiral higher amid rising insurance rates and property taxes, according to the Wall Street Journal. More frequent natural disasters and higher costs for home repairs have prompted insurance companies to increase premiums, while soaring home values have led to higher property taxes. According to Intercontinental Exchange, 32% of the average single-family mortgage payment was for home insurance and property taxes in September 2024, marking the highest rate for these costs since 2014. For about 9% of homeowners, insurance and taxes account for more than half of their monthly mortgage payments. Higher tax and insurance costs combined with elevated home prices and interest rates have prompted many would-be homebuyers to quit looking. A weak housing market can reduce demand for residential appraisals.
- Fitch Ratings’ US CMBS delinquency rate rose by 22 basis points to 2.98% in December 2024 from 2.76 in November. The December rise was driven by a rise in office maturity delinquencies and a reduction in resolution volumes. Commercial mortgage-backed securities (CMBS) are fixed-income investment products backed by mortgages on commercial properties rather than residential real estate. The delinquency rate is the percentage of commercial real estate loans that were 30 or more days past due or in foreclosure. A rising delinquency rate indicates that an increasing number of commercial property owners cannot pay the mortgages on those properties. Current and prior-month delinquency rates for December and November were: Office: 7.18% (from 6.28% in November); Retail: 3.96% (from 3.80); Hotel: 3.43% (from 3.64%); Multifamily: 0.77% (from 0.79%); Industrial: 0.37% (from 0.15%); Mixed Use: 4.43% (from 4.03%); Self-storage: 0.05% (from 0.01%); and Other: 1.00% (from 0.97%). An increase in commercial foreclosures can boost demand for commercial appraisal services.
- In the wake of the pandemic, open-air shopping centers are having a moment, according to The Wall Street Journal. As demand has swung back to in-person shopping, neighborhood shopping centers have been fuller than ecommerce warehouses, according to CBRE. The most desirable retail spaces are those anchored by grocery stores, as grocery store foot traffic was 12% higher in the third quarter of 2024 than during the same period in 2019, according to Globe Street. The types of establishments filling the space adjacent to grocery are ones that face little threat from online retail, such as nail salons, medical centers, yoga studios, and coffee shops. Flexible work arrangements have led to more traffic for neighborhood shopping centers.
- According to some industry insiders’ estimates, the 2024 housing market may have been the slowest in nearly 30 years as high mortgage rates and home prices combined with extremely low housing inventories have kept homeowners locked in place and would-be homebuyers priced out of the market, according to The New York Times. The National Association of Realtors estimates that four million homes were sold in 2024, marking the second straight year of historically weak activity, and the slowest home sales since 1995. Market observers note that the housing crisis is a product of weak supply. Builders have struggled amid lingering pandemic-era problems, including high borrowing, labor, and materials costs. Freddie Mac estimates the housing shortage equals about 3.7 million homes. The outlook for 2025 remains uncertain as home prices and mortgage rates are expected to remain stubbornly high.
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