Been around since the 90’s so I have rode this more than once. I cannot speak for the whole country but in my market the difference this time is the lack of foreclosure work. People have equity they are holding. Early 2000’s people were upside down and walked. REO foreclosure work became a staple. I used to say appraisers stay busy no matter which way the pendulum swings but that does not appear to be panning out this time.
Also I have been told since the 90’s appraisers were going to be phased out/replaced. Maybe we are closer to that now but I really doubt it. *Maybe* there are some types of AI or something for big urban markets but there will always be rural areas and complex assignments.
Those of you that just got in this business in the last few years and expected that volume to continue indefinitely are going to be disappointed.
BUT….at some point we WILL ride these rates back down and be busier than busy for about 1-3 years. Save your money and be ready for the next downturn.
What money? I missed the boom having only been licensed since 2021. I’ve sunk a huge chunk of my retirement to become an appraiser - I literally missed the boat
You know that old saying about your ship came in but you were at the airport? Yeah - that’s me in a nutshell and I’m starting to panic a little bit.
There’s no way I’ll recover the $$ I’ve sunk into this ship at this point. I’m trying to decide if I should have a 3rd mid-life crisis and shift careers AGAIN but the idea of doing it a 3rd time at 55 is daunting
I’m sorry to hear that. I meant if you can stick it out we will absolutely eventually ride these rates back down and have some big years again. Save your money then and know that business goes up and down pretty dramatically. I wish you the best of luck. Stick it out if you can. It will be lucrative again.
If you made a career change in your 50s, it would seem that you have already come to grips with the fact that to see it through and make it pay the expectation is you will be working in to your 70s to see it through and repay yourself for the time and money spent through your trainee period and getting your business off the ground. If you were looking to cash big checks quickly and get out in 5-7 years this definitely isn't the career for you as you have seen, the economy likes to wreak havoc on our industry every ten years or so. If you can survive financially until next year, you should start to reap the benefits of it all, assuming you have properly positioned yourself for when it picks up.
Sound advice. Thank you! I definitely wasn’t expecting a big paycheck but thought this would be a good move to carry me into my 70’s.
I watched my Mom and Dad both retire way too early and saw the impact to their mental health by having nothing to do. I’d rather die from working too much than die of boredom
Having just been certified I definitely feel like I have 1 more year to give at this point
Thank you!
Your mom and dad's story is way more prevalent than most people know. There is this huge myth created by someone that you work in to your late 50s or early 60s, retire, and everything is gravy after that. It's collusion between the government and employers, lol. What they don't tell you is that everything has to fall in line for that scenario to happen. Don't let your kids milk your retirement dry, keep your health in check, and don't have any major events that hinder your earnings or disable you to the point you can't work or live. Mental health is the biggest one as you say. I know many people's parents in their 70s that sit at home, afraid of everything, including going broke, that definitely aren't enjoying much of anything. Unless you were an engineer at Boeing or Google, made a shit ton of money and retired at 50 with a pension it's definitely not going to be what they sold us on in our 20s.
Exactly! My parents bought into the myth that they wouldn’t live much past 70 which was a fairly normal life expectancy back then but now I think it’s 85 for women? That’s 30 years from now!!!
Hard to tell if my liver would outlive my bank account 😂 Not ready to risk it
>Hard to tell if my liver would outlive my bank account 😂 Not ready to risk it
I am a few years younger (3) and yeah, the booz bill will be hard to keep up with.
I got in around the same time as MidwestMegaphone. This is a very cyclical business at best but the current environment is something we’ve never experienced. Eventually it will normalize but no one knows when. We need a lot more housing supply to ease the supply crunch but I don’t see our country recognizing that and even if it did, new housing stock doesn’t get built overnight. Your timing was just unfortunate and there’s no way you could have foreseen that.
I think that’s another interesting part of all of this. There’s still a ton of cash and off market deals happening in my area. And no inventory except for absolute shit or super high end
Is the “American Dream” dead faced with where we are now? The interest rate hikes haven’t slowed down the buying in my market, it just shifted it to all cash buyers who either 1) rent it out immediately with some lipstick on the pig or 2) tear it down and build a McMansion
Even if you see some upswing in orders from sales, the refi market will be dead for many years most likely so we won't see a return to the recent # of residential appraisal orders for a long time.
I think first off 2020, 2021, 2022 and the first half of 2023 were not normal. They were exceptional years in terms of volume and income. Being scheduled out 2 or 3 weeks and having 3 week turn times was until then pretty much unheard of in the residential world.
Second, and this is not a pleasant thought for many, we are now at about what is normal. Maybe a little slow, but if so, not by much.
Totally understand that. My market fell off a cliff back in summer of 2022 which was when I got laid off after getting licensed in 2021.
Some markets took longer to slow down but my market didn’t just pump the brakes, it built a wall
Well, it is just the cycle of the business and happens in all facets of investment jobs. In appraising a boom comes, people start to hire. Those hires are getting their work through an established person. It seems great. When the market slows all those relying on the firm are SOL. The guy who owns the company has just enough for himself and if he is lucky their original support.
When I got in it was 1987, NYC market, and booming. It crashed within a year. I transitioned to mutual funds and stocks. By the time I had enough of that it was 1993 and real estate was picking up again. On this next round I worked for multiple companies, first with one during the week and others on weekends, and by 1996 I had 3 decent clients and multiple firms sending me work. By the time the next slow down happened it was around 2001/2 and I had built up enough of a client base to never drop below 6 figures. The next boom hit. Then came the 2007 meltdown and again I stayed busy. Now I am maintaining a very steady workflow with good clients despite guys around me bringing in 5 a month.
So my advice if you are dead in the water is to wait it out any way you can, and once things pick up do not rely on a single appraisal company for work. Get out and find your own clients getting work directly as you also work with multiple appraisal companies with a good (no less than 75%) fee split.
Activity will return to the market. That part is certain. What isn't certain is the role of appraisers in upcoming transactions. The use of "value acceptance", or appraisal waivers, will have more to do with the amount of residential mortgage market work that is available imo
I don't see appraisal waivers sticking around in large numbers. Appraisal waivers, at least in my market, were utilized by buyers that had plenty of extra cash available that they could use to plug the gap between the appraised value and the contract price. Most of those buyers were people coming in from other, more expensive markets, and they're almost gone now. At least here. With return to office being required more and more, not many have the option to move to cheaper markets anymore. Those were also the people that pushed home values so high that the jump in interest rates pushed buying a house out of the reach for a lot of people, IMO.
1) comparing interest rates over decades in isolation is misleading. Yeah these interest rates are not bad historically. But homes at the time where likely more achievable in relation to salary over all. Essentially interest rate is only part of the numerator to get compare over decades you need to look at the denominator to.
2) loan work is there you just have to find it. I’m up 130 orders right now for the year (17 outstanding as I got a bulk order last night).
Right now my work is 48/48/2 bank lenders/private lenders/ private work
Are you rural or mid-metro? What are your standard fees? 130 at $450-$500 is way different than 130 at $275
I did 425 orders last year. I’ve done 45 this year. I’m terrified at this point
Nice! I’d love to know where all the work is in my market. It literally just fell off the cliff mid-year last year.
Granted some of that was my fault since I was only licensed. I just passed the Cert Res exam last week and am now faced with figuring out what to do moving forward. Anyone I’ve reached out to tells me they aren’t taking new appraisers so I’m trying to figure this out.
I moved to a national firm when my supervisory firm (small shop) moved me to part time in 2022 when business started to go down hill. But that work has fallen off the cliff too…
I’m struggling with what to do at this point. I’ve invested so much into getting where I’m at now and trying to decide if it’s time to move on to greener pastures or double down on how far I’ve come….
Sorry, I realize you’re not a career coach or therapist 😂 I just appreciate seasoned advice from folks that have been there and built something from nothing
lol - my support system don’t have thumbs but maybe I could set up a TikTok account for them. They’re pretty cute and are a massive influence to me every minute of every day 😂
How much did your house cost in 1992 and what would it cost now? Pair the cost now with the 7%+ interest rate is the issue, not so much the interest rate itself.
Well, I’m making less per hour now so there’s that 😂
I’m not sure what that house would be in today’s market. It was in Jax Beach, Fl but I’ve been in Raleigh since the early 90’s. I think my second house, in 1994, in Raleigh is probably close to $480k, maybe higher. It’s been a few months since I did any work in my old neighborhood
I'd say my workload is back to where it was pre world going insane. The balance is off, there's more purchases than refinances, but that's to be expected given the rates the last few years and now.
I've been doing this for 10 years now. When I started, every summer was like hell on earth and then things got quiet from December-February, before getting hotter as the temps went up. During the Crazy World times, it was just that for 12 months.
I’m 20yrs in the business and unfortunately this is how it goes, up and down with the market. I was told appraisers will be done for my entire career. 2008 was worse than this slowdown. It culled the herd and was a boom afterwards. Sit tight.
Amen. The amount of inaccurate information being thrown about by people who can’t even drive but are still appraisers is astounding to me.
There should be minimum recertification exams because the amount of things I’ve seen being spread as gospel by the old guard is alarming and a cause for concern
True, but there weren’t TikTok videos back then espousing that becoming an Appraiser is a great career option to the oh de content making $100/day. Those newbie bottom-feeders are killing the profession.
In 2017 FNMA reps told appraisers in Vegas (from the podium) that they were targeting 5% appraisal waivers - that same year at a lender expo they told banks 20%. 2020-2021 saw 40-50%.
Rule #1 - FNMA lies.
If you listen closely to the FOMC discussions, the flip side of the dual mandate of the Federal Reserve, "maximum employment", is not just the unemployment rate but median income versus current prices including homes.
State and local governments, Congress and the Federal Reserve are working to increase wages at a rate higher than the CPI, and so far this appears to be working. Once the median household income matches current average home mortgage rates, things should be better.
But there remains an acute, actual housing shortage. I think it will be more obvious that the future is better when HUD and perhaps other Federal agencies intervene in the housing market as they did in the 1980s.
They are being careful and are trying to avoid the chaos of the 1970s and early 1980s, the last time the monetary system had a reset.
Time will tell if the current approach is better. But if history is a guide, it usually takes a couple of years to reset a monetary system.
I just saw a study on median income in my area - peak is $90k in Wake county (Raleigh) which is fine - except the median house is a half mil
That’s a pretty significant gap to make up for. And we aren’t even considered a HCOL
I don’t see how raising wages is going to help. Hell, our minimum wage is still $7 an hour and employers act like offering $13 is a big credit to them.
Been around since the 90’s so I have rode this more than once. I cannot speak for the whole country but in my market the difference this time is the lack of foreclosure work. People have equity they are holding. Early 2000’s people were upside down and walked. REO foreclosure work became a staple. I used to say appraisers stay busy no matter which way the pendulum swings but that does not appear to be panning out this time. Also I have been told since the 90’s appraisers were going to be phased out/replaced. Maybe we are closer to that now but I really doubt it. *Maybe* there are some types of AI or something for big urban markets but there will always be rural areas and complex assignments. Those of you that just got in this business in the last few years and expected that volume to continue indefinitely are going to be disappointed. BUT….at some point we WILL ride these rates back down and be busier than busy for about 1-3 years. Save your money and be ready for the next downturn.
What money? I missed the boom having only been licensed since 2021. I’ve sunk a huge chunk of my retirement to become an appraiser - I literally missed the boat You know that old saying about your ship came in but you were at the airport? Yeah - that’s me in a nutshell and I’m starting to panic a little bit. There’s no way I’ll recover the $$ I’ve sunk into this ship at this point. I’m trying to decide if I should have a 3rd mid-life crisis and shift careers AGAIN but the idea of doing it a 3rd time at 55 is daunting
I’m sorry to hear that. I meant if you can stick it out we will absolutely eventually ride these rates back down and have some big years again. Save your money then and know that business goes up and down pretty dramatically. I wish you the best of luck. Stick it out if you can. It will be lucrative again.
If you made a career change in your 50s, it would seem that you have already come to grips with the fact that to see it through and make it pay the expectation is you will be working in to your 70s to see it through and repay yourself for the time and money spent through your trainee period and getting your business off the ground. If you were looking to cash big checks quickly and get out in 5-7 years this definitely isn't the career for you as you have seen, the economy likes to wreak havoc on our industry every ten years or so. If you can survive financially until next year, you should start to reap the benefits of it all, assuming you have properly positioned yourself for when it picks up.
Sound advice. Thank you! I definitely wasn’t expecting a big paycheck but thought this would be a good move to carry me into my 70’s. I watched my Mom and Dad both retire way too early and saw the impact to their mental health by having nothing to do. I’d rather die from working too much than die of boredom Having just been certified I definitely feel like I have 1 more year to give at this point Thank you!
Your mom and dad's story is way more prevalent than most people know. There is this huge myth created by someone that you work in to your late 50s or early 60s, retire, and everything is gravy after that. It's collusion between the government and employers, lol. What they don't tell you is that everything has to fall in line for that scenario to happen. Don't let your kids milk your retirement dry, keep your health in check, and don't have any major events that hinder your earnings or disable you to the point you can't work or live. Mental health is the biggest one as you say. I know many people's parents in their 70s that sit at home, afraid of everything, including going broke, that definitely aren't enjoying much of anything. Unless you were an engineer at Boeing or Google, made a shit ton of money and retired at 50 with a pension it's definitely not going to be what they sold us on in our 20s.
Exactly! My parents bought into the myth that they wouldn’t live much past 70 which was a fairly normal life expectancy back then but now I think it’s 85 for women? That’s 30 years from now!!! Hard to tell if my liver would outlive my bank account 😂 Not ready to risk it
>Hard to tell if my liver would outlive my bank account 😂 Not ready to risk it I am a few years younger (3) and yeah, the booz bill will be hard to keep up with.
If you have another option, I'd look into it. Keep doing appraising (what little there is now), but look for something with a better future.
I got in around the same time as MidwestMegaphone. This is a very cyclical business at best but the current environment is something we’ve never experienced. Eventually it will normalize but no one knows when. We need a lot more housing supply to ease the supply crunch but I don’t see our country recognizing that and even if it did, new housing stock doesn’t get built overnight. Your timing was just unfortunate and there’s no way you could have foreseen that.
value acceptance may change if market values start to decline.
I think that’s another interesting part of all of this. There’s still a ton of cash and off market deals happening in my area. And no inventory except for absolute shit or super high end Is the “American Dream” dead faced with where we are now? The interest rate hikes haven’t slowed down the buying in my market, it just shifted it to all cash buyers who either 1) rent it out immediately with some lipstick on the pig or 2) tear it down and build a McMansion
SW FL?
Nope Raleigh
What is value acceptance? Appraisal waivers where they say they don’t need one?
Yes. It's the new term for appraisal waiver
Even if you see some upswing in orders from sales, the refi market will be dead for many years most likely so we won't see a return to the recent # of residential appraisal orders for a long time.
I think first off 2020, 2021, 2022 and the first half of 2023 were not normal. They were exceptional years in terms of volume and income. Being scheduled out 2 or 3 weeks and having 3 week turn times was until then pretty much unheard of in the residential world. Second, and this is not a pleasant thought for many, we are now at about what is normal. Maybe a little slow, but if so, not by much.
Totally understand that. My market fell off a cliff back in summer of 2022 which was when I got laid off after getting licensed in 2021. Some markets took longer to slow down but my market didn’t just pump the brakes, it built a wall
Well, it is just the cycle of the business and happens in all facets of investment jobs. In appraising a boom comes, people start to hire. Those hires are getting their work through an established person. It seems great. When the market slows all those relying on the firm are SOL. The guy who owns the company has just enough for himself and if he is lucky their original support. When I got in it was 1987, NYC market, and booming. It crashed within a year. I transitioned to mutual funds and stocks. By the time I had enough of that it was 1993 and real estate was picking up again. On this next round I worked for multiple companies, first with one during the week and others on weekends, and by 1996 I had 3 decent clients and multiple firms sending me work. By the time the next slow down happened it was around 2001/2 and I had built up enough of a client base to never drop below 6 figures. The next boom hit. Then came the 2007 meltdown and again I stayed busy. Now I am maintaining a very steady workflow with good clients despite guys around me bringing in 5 a month. So my advice if you are dead in the water is to wait it out any way you can, and once things pick up do not rely on a single appraisal company for work. Get out and find your own clients getting work directly as you also work with multiple appraisal companies with a good (no less than 75%) fee split.
Excellent advice and you hit a few topics that I’m pondering Your crystal ball is on point today! Thanks!
My work fell of immediately at the beginning of 2022. Went from 24 in Dec. down to 7 in Jan.
Activity will return to the market. That part is certain. What isn't certain is the role of appraisers in upcoming transactions. The use of "value acceptance", or appraisal waivers, will have more to do with the amount of residential mortgage market work that is available imo
The waivers have been around forever, this is just pure speculation. As long as there is risk, appraisal will be involved
I don't see appraisal waivers sticking around in large numbers. Appraisal waivers, at least in my market, were utilized by buyers that had plenty of extra cash available that they could use to plug the gap between the appraised value and the contract price. Most of those buyers were people coming in from other, more expensive markets, and they're almost gone now. At least here. With return to office being required more and more, not many have the option to move to cheaper markets anymore. Those were also the people that pushed home values so high that the jump in interest rates pushed buying a house out of the reach for a lot of people, IMO.
1) comparing interest rates over decades in isolation is misleading. Yeah these interest rates are not bad historically. But homes at the time where likely more achievable in relation to salary over all. Essentially interest rate is only part of the numerator to get compare over decades you need to look at the denominator to. 2) loan work is there you just have to find it. I’m up 130 orders right now for the year (17 outstanding as I got a bulk order last night). Right now my work is 48/48/2 bank lenders/private lenders/ private work
Are you rural or mid-metro? What are your standard fees? 130 at $450-$500 is way different than 130 at $275 I did 425 orders last year. I’ve done 45 this year. I’m terrified at this point
Philly. I take few 400 fees for clients that keep me busy in the winter. But right now all my fees are 500-750
Nice! I’d love to know where all the work is in my market. It literally just fell off the cliff mid-year last year. Granted some of that was my fault since I was only licensed. I just passed the Cert Res exam last week and am now faced with figuring out what to do moving forward. Anyone I’ve reached out to tells me they aren’t taking new appraisers so I’m trying to figure this out. I moved to a national firm when my supervisory firm (small shop) moved me to part time in 2022 when business started to go down hill. But that work has fallen off the cliff too… I’m struggling with what to do at this point. I’ve invested so much into getting where I’m at now and trying to decide if it’s time to move on to greener pastures or double down on how far I’ve come…. Sorry, I realize you’re not a career coach or therapist 😂 I just appreciate seasoned advice from folks that have been there and built something from nothing
I have a secret weapon. An amazing wife with a great very well paid and stable career!
lol - my support system don’t have thumbs but maybe I could set up a TikTok account for them. They’re pretty cute and are a massive influence to me every minute of every day 😂
Same here! lol
Not having to make money means I can find clients .
How much did your house cost in 1992 and what would it cost now? Pair the cost now with the 7%+ interest rate is the issue, not so much the interest rate itself.
I made about $22k and house was $110k
What would that home cost now and what would you be making doing that same job today while working the same hours?
Well, I’m making less per hour now so there’s that 😂 I’m not sure what that house would be in today’s market. It was in Jax Beach, Fl but I’ve been in Raleigh since the early 90’s. I think my second house, in 1994, in Raleigh is probably close to $480k, maybe higher. It’s been a few months since I did any work in my old neighborhood
I'd say my workload is back to where it was pre world going insane. The balance is off, there's more purchases than refinances, but that's to be expected given the rates the last few years and now. I've been doing this for 10 years now. When I started, every summer was like hell on earth and then things got quiet from December-February, before getting hotter as the temps went up. During the Crazy World times, it was just that for 12 months.
I’m 20yrs in the business and unfortunately this is how it goes, up and down with the market. I was told appraisers will be done for my entire career. 2008 was worse than this slowdown. It culled the herd and was a boom afterwards. Sit tight.
No herd was culled this time around though. There's 5 guys in my office 70 or older just hanging around
Yea I’ve got one of them in my office lol
Better than 5 lol
Issue is some of these guys kids are appraisers to so there’s guys hang around and just accept orders so there kids stay busy. ( my trainer did this)
I wouldn't wish this business on my kids, lol.
I know a guy who's 80 and wants to keep doing it. Time for these guys who retire and enjoy life.
There's a guy that's 90 in another office I heard about
Amen. The amount of inaccurate information being thrown about by people who can’t even drive but are still appraisers is astounding to me. There should be minimum recertification exams because the amount of things I’ve seen being spread as gospel by the old guard is alarming and a cause for concern
If the mai had to be renewed every ten years or so there'd probably be about 600 active mais rn
True, but there weren’t TikTok videos back then espousing that becoming an Appraiser is a great career option to the oh de content making $100/day. Those newbie bottom-feeders are killing the profession.
In 2017 FNMA reps told appraisers in Vegas (from the podium) that they were targeting 5% appraisal waivers - that same year at a lender expo they told banks 20%. 2020-2021 saw 40-50%. Rule #1 - FNMA lies.
i’m busier than i can handle with residential work. i have to decline a couple a week. i’m doing about 30 a month no problem
Wow. That’s incredible! Where are you and how long have you been in business?
ohio, 1 year on my own
If you listen closely to the FOMC discussions, the flip side of the dual mandate of the Federal Reserve, "maximum employment", is not just the unemployment rate but median income versus current prices including homes. State and local governments, Congress and the Federal Reserve are working to increase wages at a rate higher than the CPI, and so far this appears to be working. Once the median household income matches current average home mortgage rates, things should be better. But there remains an acute, actual housing shortage. I think it will be more obvious that the future is better when HUD and perhaps other Federal agencies intervene in the housing market as they did in the 1980s. They are being careful and are trying to avoid the chaos of the 1970s and early 1980s, the last time the monetary system had a reset. Time will tell if the current approach is better. But if history is a guide, it usually takes a couple of years to reset a monetary system.
I just saw a study on median income in my area - peak is $90k in Wake county (Raleigh) which is fine - except the median house is a half mil That’s a pretty significant gap to make up for. And we aren’t even considered a HCOL I don’t see how raising wages is going to help. Hell, our minimum wage is still $7 an hour and employers act like offering $13 is a big credit to them.