Whether it’s a single-family home or a high-rise in the heart of downtown, the real estate market hinges on the appraisal. Big data, training new talent, and the uncertain future of the Dodd-Frank Act are all posing challenges to the appraisal industry. Couple that with a concern over new talent acquisition, and we have a possibly precarious scenario for the appraisal industry.
Adam Johnston, Chief Appraiser for Genworth Mortgage Insurance (MI), a unit of Genworth Financial, Inc., and 2017 Vice Chair of The Appraisal Foundation Board of Trustees, discussed where he thinks the future of the appraisal industry is headed in an interview with DS News.
Q: What effect did Dodd Frank have on the appraisal industry?
A: Dodd-Frank was a net gain for the industry. By providing requirements for the use of appraisers, it highlighted their importance for property valuation. It solidified independence requirements, which was key for the appraiser industry, and had been previously compromised. Dodd-Frank provided grounds for registry and regulation of appraisal management companies which was essentially nonexistent before.
Q: What impact is technology having in the appraisal industry?
A: The appraisal profession is finding itself in a state of change. Technology has enabled big data aggregation, and the means to conduct complex analysis of this data with high speed. This has shifted the appraiser domain. But, appraisers are objective and well placed in local markets. That makes them valuable inputs even with big data analysis. We need to make sure this advantage is known by collaborating under a unified message and vision.
Q: Are there any concerns about future growth in the appraisal industry?
A: There are concerns about sourcing new talent to the industry. Training has been cited as one of the larger challenges but also transitioning appraisal to being a career to which high school and college students aspire. The Appraisal Foundation has done a lot of work in this area by promoting valuation as a career at the high school and university level.
Q: What will be your focus as Vice Chair of The Appraisal Foundation?
A: As the industry looks to provide more access to first-time home buyers, appraisers have become even more important. It's important to protect consumers with credible and honest valuations. I want to be a productive contributor in the work of the Foundation by promoting and preserving the public trust in the profession. I’ll listen closely to the appraisers, industry organizations, regulators, and others who have an interest in maintaining a confident and professional industry.
Editor’s Note: The commentary in this article is provided via Johnston’s role as Chief Appraiser for Genworth Mortgage Insurance and does not necessarily reflect the views of the Appraisal Foundation.