The appraisal industry — just like so many others — has taken all kinds of twists and turns over the past year. Between COVID-19, the changes, and new ideas that came along with it, you may be wondering how the industry is going to move forward. Which lessons will be kept, and which ones will be forgotten?
While nobody can tell what the future holds, market trends and industry professionals can indicate patterns going forward, even if nobody knows for sure.
Whether you’re an appraiser or another industry professional who frequently works with appraisers, the changing nature of the industry is likely enough to make you feel a bit overwhelmed. Even with the rapid changes, there are some post-COVID lessons you can take into consideration as you go back to work as usual — or almost as usual — in a vaccinated world.
While every appraiser is different, there are a few universal ways that COVID has changed the industry overall. Here are just a few lessons you can take into the appraisal industry post-COVID-19.
There’s Nothing Like Hands-On Practice
This one can be applied to many different industries, and appraisal is one of them. While drive-by appraisals have been a part of the industry much longer than COVID, they are definitely not ideal in a lot of circumstances — namely, the traditional circumstances that require a home appraisal for sale.
If there’s anything the whole industry can take away from the past year, it’s that hands-on practice and being in someone’s home to appraise it isn’t just easier — it’s more effective.
Your Local Community Matters More Than Ever
The housing market is on fire right now with so many people moving out of larger cities and looking to buy a property of their own. With that said, appraisers are often tasked with having a knowledge of the local community and the local market — specifically how it affects the quality of a home.
Everything from neighborhood sales to unique weather conditions plays a role in the appraisal process. And with rapidly developing communities, paying closer attention than ever before could play a role in more timely and accurate appraisals.
You Often Need to Take Things as They Are
One unfortunate hallmark of the post-COVID world is the worker shortage going on right now. Specifically, construction labor is in short supply.
Even in 2019, 80% of construction contractors had trouble filling hourly craft positions, which indicates the fact that COVID only amplified an already worsening problem. Unfortunately, this worker shortage and the slower wait times it creates for those seeking construction services means many projects don’t get done. Even if there are ways to improve an appraisal, it may not be in the homeowner’s best interest to pursue it.
Distress Sales Can Impact Everyone
This is a fact that will always be true, COVID or no COVID, but whether you need to pay a bit of extra mind to it will likely depend on your area.
Because most areas are experiencing a seller’s market right now, you may not run into many distress sales. However, some larger cities and metropolitan areas are seeing a decline in property values, which, combined with a larger push towards suburbs with larger real estate, might leave a few distress sales in more populated areas. For example, families itching to get out of the city in more recent months may have been in a rush to sell. Keep an eye on distress sales and stay on top of market fluctuations.
Bidding Wars Can, Too
While you might see some distress sales dropping appraisal values, it’s more likely that with the current market conditions, bidding wars, and the seller’s market nature of real estate right now, you may realize a consistent uptick in home values. It may even feel a bit odd that certain houses are worth so much money — definitely more than you would have appraised their value for pre-pandemic.
However, you know as well as anybody that the real value of a home is how much people will need to pay in order to own it. Even if it feels shocking from time to time, the bidding wars around town can give property owners a mutual leg up in scoring better values.
It Often Goes Back to Materials
However, there are things that the market can’t buy. And one of these things is the quality of the home itself — from the foundation to the quality hardwood flooring.
While the market can impact the value of a house, one thing it often fails to do is to increase the value of any single home in contrast to the others around it. Even the small details, like going with marble countertops to increase resale value over granite, updating the bathrooms with modern fixtures, and adding a comprehensive laundry setup can increase the value of a home.
At the end of the day, the best way to increase the value of a home is for that home to have valuable qualities.
Each State Will Have Different Methods Going Forward
Just like with other industries, your state may have different or unique guidelines when it comes to moving forward with the real estate market. That includes the appraisal process.
While some states have already gone mask less and returned to pre-COVID-19 policies, others need to be a bit more careful due to things like population density. It could be a steady progression back to normal.
Online Appraisals May Be Sticking Around
That said, many of the fixtures of pandemic living may stick around. Namely, online appraisals — often called desktop appraisals — could be sticking around for the near future. Especially in states with remaining restrictions or for those with health challenges, you may not see everybody jump back on the in-person appraisal train quite yet.
Lessons of Appraisal Post-COVID-19
COVID-19 has had a strong and lasting impact on so many industries, and appraisal and real estate are definitely among them. Whether you’re already back in-person or you’re taking it slow with remote work, there are so many ways you can adjust to the changes and offer the best services possible.