It is plain to see that the American economy isn't what it was in 2009. It is remarkable the changes we've seen in the US business culture during the last decade. The changes we've experienced have affected our local economy, here in southwest Idaho too.
These changes have dramatically affected the lending/banking industries, and more interestingly to me, at least, how the residential appraising industry has changed in the years that I've been appraising properties.
New in the past year was the Home Valuation Code of Conduct (HVCC), which has changed the appraising industry more than even the proponents have imagined. Common sense has been lost in the development of clients and borrowers because of the HVCC. I could blather on about HVCC has done more damage to the lending industry more than it has cured, and how the HVCC is a poorly-crafted regulation that should be abolished sooner rather than later. But we can save that for a nice face-to-face sometime. You and I can sit down over a pint (of ice cream?) to go over my thoughts. Contact me and I can recommend a nice parlor where we can go and visit.
Right now the economy is hurting. The lending/mortgage industry seems to be hurting as much as anyone. I estimate that 50% of my bank/mortgage lender contacts from a year ago have moved on to competing lenders or have left the industry entirely. I guess that 80% of my contacts from 3 years ago are no longer valid. I got word last week that one of my favorite local branches is being virtually shut down, due to corporate fiscal policies negatively affecting the local branches.
Specifically for the appraisers, the costs to operate are going up (not including the cost of gasoline), and the amount of work is increasing. Meanwhile, the work that the typical appraiser is receiving is coming with lower fees, greater client demands, and less time to deliver the finished product.
I keep hearing that 10% of all appraisers are not renewing their licenses this year. I also have been hearing that the average age for residential appraisers nationwide is 58 years, and that half of the licensed appraisers today will be retiring in the next 5-10 years.
I heard through some appraiser colleagues of mine, when chatting with members of our state board, found out that even the state board is concerned with the numbers of appraisers leaving the industry, and they are not seeing new appraisers being trained. The national standards board have recently mandated higher entrance requirements for trainee appraisers. Coupled with lower fees and a weaker market, there is little incentive for people to train to become a licensed appraiser.
I've heard a few appraiser colleagues bandy about the phrase "let's form a union". Unionizing appraisers could mean even greater changes are coming down the pike. I've never been a advocate of labor unions, but the time might be ripe for appraisers to form a collective to provide support to a shrinking class of laborers. The threat of striking appraisers could artificially increase fees to the appraiser, while lengthening the time a product could be delivered to the client, all the while giving the appraiser a political voice. Hmmm, giving the appraiser a political voice might have been the fix for the HVCC in the first place.
It's a scary prospect for the appraiser, but a unionized appraiser workforce may be a scarier prospect for lenders and future borrowers.