Photo: Bisnow/created with assistance from OpenAI's DALL-E

The Average Appraiser Is Aging Out Of The Workforce. A Crippling Labor Shortage Looms

This is Part 2 of a four-part Bisnow investigative series exploring the appraisal profession, its importance to commercial real estate and the broader economy, and the people and organizations that govern the industry. Read Part 1 herePart 2 here and Part 3 here.

Beverly Varallo was one year into her first mentorship to become a licensed appraiser when she realized that the woman under whom she was training wasn’t keeping up her end of the deal.

Varallo had spent the year going on inspections with her mentor, helping with record-keeping and learning the appraisal business. She was also racking up the minimum 2,000 hours of training needed to get licensed.

Or so she thought.

The Average Appraiser Is Aging Out Of The Workforce. A Crippling Labor Shortage Looms

She eventually discovered her hours weren’t being properly tracked, and none of them counted toward her goal. 

She switched mentors, started over counting her hours and this year, after nearly five years of training, became a licensed appraiser. She remained at her new mentor’s firm as a partner, but she still faces clients questioning her experience.

“I've been working for five years, I haven't had a single order come in my name,” said Varallo, 41, who works at Zen Appraiser in Philadelphia. “I'm still working under my supervisor, signing as a co-appraiser.”

Her story is playing out on repeat among a sorely needed new generation of appraisers. The certification process requires an apprenticeship program, thousands of hours of on-the-job training and online or in-person courses. It can be a daunting series of hurdles that is only exacerbated by a reluctance across the industry to take on new trainees.

The dynamic has created a demographic crisis across the industry.  

Appraisers are too old, too few and too insular. The median appraiser is 60 years old, and 80% are over 50, according to the National Association of Realtors. But the ranks of the next generation of appraisers are thin, held back by a convoluted certification system and an industry culture that shuns newcomers. 

"Unless things change and we create ways and incentives to trigger a higher rate of entry into the profession, then it's over,” Miller Samuel CEO Jonathan Miller said. “That's coming within the next decade.”

Miller, 63, said when he looks around the industry, the faces staring back are all around his age. What’s coming, Miller thinks, is a chronic shortage of appraisers that threatens to dismantle the industry. 

“I'm not going to be appraising when I'm 73, and all of my peers are plus or minus five years of my age," he said.

The appraisal industry is an often overlooked but crucial piece of the real estate business, with valuations underpinning loan assumptions, acquisitions and the balance sheets of REITs and other major industry players.

At the same time, appraisals and how they’re determined are facing new scrutiny, as analysts question valuations at Blackstone Real Estate Income Trust and property value disputes underpinned Donald Trump’s fraud case that left the former president owing New York City $457M

Freddie Mac, one of the country’s largest mortgage underwriters, has stopped accepting valuations from BBG, one of the country’s largest appraisal firms, after placing the company on its restricted vendor list as it conducts a review. 

But despite its role as a key piston in the economic engine that is the real estate industry, appraising lacks fresh entrants to replace its aging ranks. Industry groups are making moves to boost recruitment, but a lack of awareness and a high barrier to entry is stifling growth in the industry. 

Turning A Maze Into A Welcome Mat

There were 77,600 property appraisers and assessors across the country as of 2022, according to the U.S. Bureau of Labor Statistics. The industry is only projected to see 5% growth through 2032, adding just 3,600 net new appraisers. 

Pursuing a career in appraisal is an arduous journey that starts with a college degree and requires additional training and thousands of apprenticeship hours. It takes at least two years of full-time work for a recent graduate to complete the certification process. 

Requirements differ by state and role. Minimum requirements for a certified general appraisal — the highest certification but the one required for commercial transactions over $1M — are a college degree and 3,000 hours of on-the-job experience. 

The Average Appraiser Is Aging Out Of The Workforce. A Crippling Labor Shortage Looms

The Appraisal Institute launched the Practical Applications of Real Estate Appraisal program, or PAREA, in March 2023 to bring new candidates to the field. The online course connects students with mentors and ultimately leads to a licensed residential appraiser certificate, the first tier of licensing for the industry.

After the 18- to 24-month course, which starts at $3,995, graduates have roughly 2,000 hours of training to become a certified general appraiser, which most lenders and banks require. 

PAREA’s inaugural class started in September. It includes 153 students, 40% of whom self-identify as female, according to the Appraisal Institute, the program’s operator and the industry’s main advocacy and lobbying group.  

Two people have completed the program so far, with the institute aiming to graduate another 25 to 50 this year, Appraisal Institute President Sandra Adomatis said.

“The majority of our students in the program are working a full-time job, or at least a part-time job,” Adomatis said. “They’re only doing PAREA on the weekends and at night.”

Participation is capped because the four full-time mentors employed by the Appraisal Institute are at capacity and can’t take on any more trainees, Adomatis said. A list of 182 people are waiting for their spot in the program, and another 1,900 are going through a certification checklist on the institute’s website that walks applicants through the early steps of the process. 

PAREA is meant to offset some of the demand for mentors in the field, but structured hands-on programs do exist at the major brokerage firms that have appraiser teams like JLL and Cushman & Wakefield. 

That’s how Jett Caplin found his way into appraisals after graduating from Florida State University. Caplin, whose father, grandfather and uncle all work in real estate, studied business and hospitality. 

He joined Cushman & Wakefield out of college working on a team that did hospitality and gaming appraisals before moving to a general appraisal team in Miami. 

Caplin’s been connected with a mentor at the firm for the better part of two years, but he estimates he’s no more than 75% of the way toward becoming a certified general appraiser. 

He completes coursework online during slower periods at the office as well as in his off hours,  with Cushman helping pay for the classes that allow students to go at their own pace. Caplin estimates they cost several thousand dollars. 

“For someone that's outside of the larger corporate structure where there's some support, if someone were to get in on a smaller firm basis, I can imagine that would be much more difficult because the cost is pretty significant,” he said.   

The Mentorship Bottleneck

Beyond the cost and time commitment, though, the chronic shortage of mentors is the top hurdle for bringing in new talent. 

Apart from PAREA and efforts by larger brokerages, aspiring appraisers are left to their own devices to find a mentor, with no official tools available to facilitate that connection. Smaller firms, with financial and personnel constraints, are frequently reluctant to bring on new talent. 

Some lenders won’t allow trainees to be involved in their valuations. Other clients will leave if they find out their appraiser is mentoring someone. Varallo remembers her mentor, Carole Henrysen of Zen Appraiser, actually lost a client or two when she joined the firm.   

Some appraisers, especially in the residential space, liken taking on an apprentice to training their competition. 

The Average Appraiser Is Aging Out Of The Workforce. A Crippling Labor Shortage Looms
Carole Henrysen of Zen Appraiser has been on both sides of the appraisal mentor/mentee relationship.

“There really is no incentive for an appraiser to become a mentor,” said the 51-year-old Henrysen. “It's a mindset thing. A lot of appraisers think, ‘Why would I train my competition?’”

Henrysen took on an apprentice partly because she remembered how hard it was to find someone when she entered the industry. She used the phone book to “probably call 100 appraisers in the area” before finding one who would mentor her. 

She began working under Howard Lichtenstein in 2004, just as he was launching an eponymous business. Lichtenstein was diagnosed with cancer a year later, but the pair kept working together through years of treatment and after he was declared cancer-free.

He transferred the business to Henrysen in 2014 without any money being exchanged, a tradition she plans to carry forward with her current apprentice, and kept working for Henrysen part-time. She eventually changed the name to Zen Appraiser. 

Lichtenstein’s cancer came back in 2022, and he died that year. Henrysen is still grieving the loss of a person she considered a father figure. 

“He taught me everything he knew and then some,” Henrysen said. “I stayed with him, eventually he retired, and then he worked for me until he died.”

Henrysen connected with Varallo through a Facebook group for appraisers, where she said aspiring professionals are consistently posting or sending messages looking for a mentor. 

Her experience coming up in the industry helped make it easier to agree when a young appraiser messaged her on Facebook, even though she knew that taking on an apprentice doesn’t necessarily make economic sense.   

“When you're training somebody, really it's costing you money to do it,” Henrysen said. “That time you're putting in to train somebody, you could be making money doing work.”

PAREA is meant to shift some of the mentorship shortage off of experienced appraisers and onto the Appraisal Institute, but the waitlist for the course signals that access to mentors remains a significant bottleneck across the industry.

Still, Adomatis thinks the structured solution PAREA offers is the best way to ensure trainees are getting a high-quality training experience while increasing access for a diverse group of people.

“There has been talk about providing an incentive to get folks to take on more trainees,” Adomatis said. “When you throw money out there for somebody to do something, it doesn't really mean they'll do an ideal job.”

Making Diversity A Cornerstone

Few formal avenues exist to connect with an experienced appraiser outside of PAREA, making professional relationships the key currency to unlocking a traditional mentorship. The result is that apprentices are pulled from the professional networks of an industry that is overwhelmingly white and male, leaving fewer inroads for minorities and women.   

"If you look for the essential question, all of this having to do with bias and diversity and the aging appraiser population and everything else, what is the one unlock that would make everything else that we do so much easier?" said Jillian White, CEO of New York-based Appraisal Insights. “That is the eradication of that supervisory-trainee relationship.”

Around 68% of appraisers are men and less than 10% are Black, Hispanic or Latino, according to a 2024 demographic survey from The Appraisal Foundation, the industry’s quasi-governmental regulator. 

Hispanic and Latino appraisers grew to 5.6% of the total in the 2024 survey compared to 3.7% in 2021, but the percentage of Black appraisers slid 10 basis points to 4.3% over the same period.

“It's an old white man's game,” Henrysen said. “That's what it is.”  

Henrysen operates a small residential appraisal firm in Philadelphia, but the picture is the same in the institutional commercial space, a reflection of the broader lack of diversity in the real estate sector.

“I can't tell you how many times I've been in meetings where I was the only female in the room,” said Paula Thoreen, Cushman & Wakefield’s Houston-based executive managing director of appraisals. 

But, she said, things are improving little by little. 

“Now there are two or three in the room.”

The Appraisal Foundation recognized the need to increase diversity in the appraisal ranks and have a number of initiatives aimed at improving representation, Appraisal Foundation President Kelly Davids said in a statement. 

“Welcoming a diverse new generation of appraisers to this incredible profession has been a cornerstone of The Appraisal Foundation’s work over the last four years, and it is a key goal in our strategic plan for this decade,” Davids said. 

The foundation sponsors the Appraisal Diversity Initiative, which works with the National Urban League to provide resources for young talent. 

The Appraisal Institute has given out more than 700 scholarships for PAREA, including some full-ride packages for students. And the foundation supports a program that sends representatives to historically Black colleges and universities to increase awareness about the industry.

The National Fair Housing Alliance published a report in January 2022 that outlined steps The Appraisal Foundation could take to reduce barriers to entry and increase diversity. 

The NFHA report recommended streamlining certifications into two credentials, residential and general appraisers, and reconsidering whether a college degree should be required to get licensed. 

It also suggested tackling the lack of willing mentors by adjusting on-the-job training requirements and replacing coursework and an exam. The Appraisal Institute launched PAREA roughly two years later, a $2M investment.

The Missing Middle In Appraisal Demographics

Other attempts at promoting the industry are happening at the state level. The Mississippi Practical Appraisal Training program, or MPAT, is one example but is relatively small. 

It launched last year with just a couple dozen participants in the first class, which was kickstarted through grant money. But strong demand has allowed the program to shift to a self-funded model through tuition payments moving forward, E.C. Neelly IV, executive director of the Mississippi Appraisal Board, said during an appraisal subcommittee hearing in March. 

The MPAT program is designed to get students through the program in six to eight months, a faster pace than PAREA, which is done at the student’s pace and can take one to two years.

“PAREA is more virtual. I would equate PAREA to learning to fly an airplane on an airplane simulator,” Neelly said, whereas the person running the MPAT program takes students to around a dozen sites over the course of the class. 

MPAT has also attracted a diverse set of students. The inaugural class was 50% female and 45% nonwhite. 

Neelly gets around five calls a week from aspiring appraisers who have completed the coursework but can’t find a mentor for the required apprenticeship, he said in an interview last month. 

“I need to have a recording in my pocket that I can play, because you get tired of reciting the same thing over and over five or six times a week,” Neelly said he used to think. Now, at least, MPAT has given him somewhere to direct some of the callers.

The effects of this nascent patchwork of programs have yet to percolate through the industry, but their proliferation can help younger appraisal hopefuls step up into the profession. With caps on programs like PAREA, efforts from several corners at once can add to the dwindling pipeline of young talent.

Caplin and Diego Luis, the second trainee in a four-person appraisal team at Cushman & Wakefield’s Miami office, both said they regularly realize they’re the youngest person in their continuing education classrooms. 

Adrian Sanchez, a 21-year veteran of the appraisal industry mentoring Caplin and Luis, said that finding appraisers in their 30s and 40s is increasingly rare. The Great Recession sapped business and led many of Sanchez’s peers to leave the field. What was left behind was the older demographic who had built up reserves to weather a downturn, he said.  

Just 13% of all appraisers are in their 40s, according to NAR, while 9% are in their 20s and 30s. 

The hollowing out of the mid-career appraiser from the industry has left even fewer viable mentors. While big brokerages can compensate for the ebb and flow of appraisal demand, smaller shops don’t necessarily have the resources to invest in an apprentice during downturns or the time to train them when business is booming.

Programs like PAREA aim to bridge some of that gap, but Sanchez worries that the next generation of appraisers will end up leaving the industry if they can’t find someone to share their experience and their business.

“Anybody who is entering this business without great mentorship will not get very far,” he said. “It is a long, long path that most people are not necessarily willing to take.”

Bisnow reporters Sasha Jones and Ryan Wangman contributed to this report.