Across the country, appraisers generally believe their local real estate markets are stronger now than a year ago, according to an Appraisal Institute survey that polled 591 real estate valuation professionals. For example, 84% of residential appraisers and 46% of commercial appraisers surveyed expressed this sentiment about their particular market.
Nearly half of all commercial appraisers surveyed said there is currently more demand for appraisals compared to 2012, while almost all (95%) of residential appraisers held the same viewpoint.
Appraisers who value commercial properties project to have greater demand than residential appraisers in the next one- to two-years. But both groups of appraisers have a positive outlook for their companies during this time period, as 80% characterized their business as “somewhat positive” or “very positive.”
Commercial appraisers said the top five areas of growth over the next two years, in order of potential, are mortgage lending appraisals, land valuation, litigation valuation/forensic appraisal, real estate consulting (fee-based) and right-of-way/easements.
In contrast, residential appraisers forecast growth to come from mortgage lending appraisals, review appraisal services, real estate owned/foreclosure/short sales, litigation valuation/forensic appraisal and land valuation.
Additionally, commercial appraisers anticipate growth in specialized areas of valuation consulting such as studies that support for litigation, due diligence analysis in support of client acquisition or sale decisions and market studies. Also, commercial appraisers anticipate a different mix of business over the next two years predominantly to come from AMCs (36%), financial institutions (34%) and property owners/buyers directly (33%).
Meanwhile, the survey revealed that residential appraisers forecast more demand for property inspections, marketability studies and research.
Overall, both groups of appraisers said in the survey that they project demand to increase for summary, limited/restricted use, and desk review appraisals.
Conversely, demand is expected to decline for complete/self-contained appraisal reports, with 31% and 21% of commercial and residential appraisers saying this, respectively.