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
Sep 19, 2024 - Federal Reserve Cuts Interest Rates
- At its meeting in September, the Federal Reserve voted to reduce interest rates by half a percentage point, which would put the benchmark federal funds rate between 4.75% and 5%, according to The Wall Street Journal. Projections of fed officials’ moves suggest another four quarter-point cuts will come next year, which would bring the federal funds rate down to 3.5% by the end of 2025. However, it’s unclear to what extent September’s cut will affect housing demand. Mortgage applications were flat year-over-year in September. Meanwhile, for the week ending September 12, the average fixed-rate 30-year mortgage rate was 6.2%, down from 7.18% a year earlier, according to Freddie Mac. Even as mortgage rates have dropped, high home prices and other costs, including homeowner insurance, continue to weigh on affordability.
- Sales of existing US homes decreased by 2.5% in August from July and were down 4.2% year-over-year, according to the National Association of Realtors (NAR). Median existing home prices moderated from July’s all-time high, but August’s median home price rose 3.1% to $416,700 compared to August 2023. NAR chief economist Lawrence Yun said, “Home sales were disappointing again in August, but the recent development of lower mortgage rates coupled with increasing inventory is a powerful combination that will provide the environment for sales to move higher in future months.”
- In July, the US Department of Housing and Urban Development (HUD) reached an agreement with The Appraisal Foundation (TAF), an organization that sets standards and qualifications for real estate appraisers. The agreement stems from a HUD complaint and subsequent investigation that began in late 2021, which alleged that some of TAF’s policies may have led to disparities of opportunity in the appraisal industry. According to US Bureau of Labor Statistics 2023 data, nearly 95% of property appraisers are white. HUD alleged that a TAF licensure policy that relied heavily on an already-licensed friend or family member to supervise on-the-job training hours may contribute to a lack of diversity. Under the agreement, TAF will create a $1.22 million scholarship fund to pay for new appraisers to receive training. During the HUD investigation and before it, TAF took steps to address diversity, and the July agreement came with no official findings.
- In July, a group of federal regulators finalized a set of guidelines for how banks and other lenders should handle home appraisal do-overs – or a reconsideration of value (ROV), according to National Mortgage News. While consumers have always been entitled to challenge home valuations, the new guidance clarifies which circumstances warrant an ROV. The guidance was adopted jointly by the Federal Reserve, Federal Deposit Insurance Corp, Office of the Comptroller of the Currency, Consumer Financial Protection Bureau, and National Credit Union Administration. Issues that could trigger an ROV include discrimination based on color, race, sex, religion, country of origin, disability, or family status. However, the most significant change in guidance is that ROVs are "limited to real estate-related financial transactions that are secured by a single one-to-four family residential property."
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