HINDSIGHT IS 2020

Highlights from the year 2020 for the appraisal industry

by Mark Fisher

December 2020

Unless you’ve been hiding under a rock for all of 2020 (and who could blame you?), you know it has been a very unique year for everybody in the world. While a global pandemic engulfed nearly the entire planet, many changes had to be made, some good and some bad. Nearly every business was affected in some way, and the appraisal business was no exception.

We learned to adapt to many unique conditions, policies and lifestyles, so we could still offer an accurate and timely service to our clients. We also saw some good changes and trends in the past year. Good and bad, this is what we saw.

2020 posed many challenges.

Courthouses were often closed or inaccessible.

Many of the courthouses throughout Missouri, Illinois, and Iowa were either closed or operated with limited staff and shortened hours. Sometimes, we were only allowed inside by appointment. This meant that most of the property information, such as taxes and deeds, had to be obtained via phone and mail, or not obtained from the courthouse at all, especially with some counties that had no type of online data available. We often had to use alternative sources to get very standard information.

Physical inspections were hindered.

Physical inspections were also very difficult in some situations. Some clients did not want the appraiser to do a physical inspection, out of fear of exposure to the virus. Fortunately, many lending organizations temporarily lifted the requirements for having to do a physical inspection, and some clients were willing to take their own pictures and send them to us for the appraisal report.

Real estate sales were fewer.

Changes had to be made with property selling, as well. Many properties were auctioned online, rather than through public auctions. Realtors also had trouble showing properties in person. This did not directly affect us, but it did result in fewer auctions and sales for a time, meaning a lack of sales data for appraisal work.

2020 also has some high notes.

We stayed open.

Since the appraisal industry is considered essential, we were not required to close our doors. Also, most of us were working from home offices already, so our normal work habits were not interrupted by requirements for social distancing. Even at our Palmyra office, our offices were already arranged in ways that complied with social distancing. For all these reasons, we had no problem at all continuing to work.  

We benefited from low interest rates.

The 30-year fixed mortgage rate, the most popular home loan product, sank to its lowest level on record. It fell to 2.88 percent with an average 0.8 point. (Points are fees paid to a lender equal to 1 percent of the loan amount and are in addition to the interest rate.)  Since November 2018, when it was 4.94 percent, it had fallen more than two percentage points.

This was good news for the appraisal business, as it inspired many people to buy property. This seems to be the main factor that triggered the upsurge in business. Mason Spurgeon, owner of Spurgeon Appraisals, stated that this year has been the busiest he has seen since the housing bubble burst in 2008. Our requests for appraisals jumped 52% from last year, mostly due to refinancing.

We had motivated customers.

While Coronavirus fears prevented many people from carrying out a normal lifestyle, many people took advantage of having more time to focus on buying property and to take advantage of many incentives that were offered. In rural parts of the country, it seemed people were not as reluctant to get out and acquire property, as in some other parts of the nation. According to some local realtors, sales were slow in the spring and early summer, especially in the commercial sector. But they have been busier since then, especially in the residential sector, but also with agricultural property.

Moving on, looking forward

For this generation, 2020 will definitely go down in history as one of the worst years ever, due to the pandemic, social unrest and election issues. These will undoubtedly overshadow the positive points. And yet, the appraisal industry has some reasons to be thankful in an otherwise troublesome year. And we hope to service your appraisal needs in the year to come. We are already booking projects for January. Email us today for a quote.