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Why Appraisals Are Taking So Long In The Pacific Northwest
Lenders have been pulling their hair out over extreme appraisal delays in the Pacific Northwest and are trying to figure out why it's happening to a greater degree there than elsewhere.
It's well known that appraisers are aging and in increasingly short supply in rural areas, but the shortage seems to be spreading to the region's metropolitan markets. Certainly, the problem has been made worse by strong demand — Seattle and Portland, Ore., consistently rank among the country's hottest housing markets — but the shortage still seems to be more pronounced in the Northwest than in other markets, experts say.
"Wherever the population is bigger you have more appraisers, but the problem runs deeper," said Sam Heskel, the CEO of Nadlan Valuation, a Brooklyn-based appraisal management company that operates in more than 20 states.
Nadlan has not done business in the Pacific Northwest to date, in part because the appraiser shortage there relative to demand makes the process of trying to coordinate appraisers to fulfill orders too much of a hassle, Heskel said.
Lenders interviewed for this article pegged the range of appraisal turnaround times for metro areas in the region at about four to six weeks. In Pacific Northwest rural areas, it could be closer to eight weeks, said Tina Stauffer, a loan production partner in Churchill Mortgage's Gig Harbor, Wash., branch.
Typically, the average turnaround time for an appraisal is three weeks, said David Lykken, president and founder of Transformational Mortgage Solutions, a consulting firm in Austin, Texas. In some markets and circumstances, appraisals can be wrapped up in as little as seven days to two weeks.
In the Seattle market, sheer demand is a big reason why appraisal wait times are so long. In the third quarter, there were 34,566 homes sold in the Seattle region, up 37% from the same period a year earlier and up nearly 58% from the third quarter of 2014, according to Zillow data compiled by Rayan Rafay and Brad Lookabaugh at Unison, a San Francisco-based provider of consumer home equity sharing products.
Seattle is ranked No. 2 on Zillow's recent list of the hottest housing markets in the United States; Portland is also in the top 10.
Home sales have really picked up since Vancouver, British Columbia, added a tax on foreign homebuyers last summer that redirected sales into the Seattle area instead. While some of these are cash sales, they still added to the demand for appraisals.
"This foreign buyer tax just takes it [home sales] over the edge," said Rafay, the director of investment strategy at Unison.
The result is that even with appraisers largely concentrated in urban markets, as opposed to rural areas, appraisals have been badly backlogged. Indeed, appraisal delays are so extreme in the Pacific Northwest that one appraiser who had recently moved to Texas was temporarily lured back by the promise of higher pay and free housing, said A.W. Pickel III, a division president at AmCap Mortgage Ltd. in Houston.
The Pacific-Northwest is attractive in part due to strong employment in the region.
"Seattle, Portland, Tacoma and like areas have a good base of well-paying jobs," said William Fall, chief executive officer of Sugar Land, Texas-based appraisal management company Valuation Partners, which does business in those cities.
For Mark Ross, founder of Ross NW Real Estate and professional real estate broker, real estate has always been the career of choice. During his 25+ years in the industry, Mark has gained experience in....
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