By nature, I am an optimist. I can’t help it. Try as I might, I cannot seem to be a “glass-half-empty” kind of guy. Even in times of challenge and unknowns, I tend to look at the bright side. Some might believe that is akin to putting your head in the sand, but being an optimist does not mean you can’t be a realist as well. I am both. With the current environment regarding Covid 19 (aka Coronavirus), many of my appraiser-friends have reached out to me for my opinions, advice, and predictions.
Let me begin with the obvious; no one knows the eventual impact Coronavirus will have on health, the economy, or our profession. No one knows how significant this will be or how long this will last. That is the only truth we have. Many are looking to past events to predict the current impact (as appraisers, we are good at that), but the truth is; there is nothing to compare this with.
As of this writing, much is changing (even by the hour). What was an annoyance and funny memes on social media just a few days ago has turned more serious. What used to be suggestions for social distancing, has been made more a requirement. Thus, like an effective date of an appraisal, this blog is an attempt to capture a snapshot of the current environment and POSSIBLE (I emphasize that word because I am not a prophet), future impact of the current health crises.
You can say all you want about the disease itself and whether or not this has been overblown, but the truth is, this is a thing and this thing is affecting lives; among those - appraisers.
The advice you are getting on the news (and other places) is prudent. Do not shake hands. Wash your hands often with warm water and an antibacterial soap. Avoid touching your face. Though masks might not keep you from getting the virus, wearing one (if available without impacting medical services) in the houses we inspect (as well as gloves and shoe booties) can help slow the spread. Use hand-sanitizer and wiped down your equipment with wipes when you are done with each observation. These measures were taught to you by your mommas and are simply good advice. Heed them.
You may consider a few items of information in your scheduling call or text. Ask them to open doors and turn on lights for you. If you need to see the attic or crawlspace, request those areas be open and ladders already set up. The less you can touch surfaces that can harbor germs, the better. Most importantly, trust your gut. If you do not believe it is safe to enter a property - DON’T. No appraisal fee is worth putting you, your family, or the occupants at risk.
I call upon Fannie, Freddie, and the big banks (some have already done so) to consider relaxing some of their inspection requirements for a time. Drive by’s, home-owner interviews, video tours provided by the point of contact (along with some extraordinary assumptions in our reports) can be very effective in data collection. For those of you who are worried about what impact that might have on our industry long-term, I would encourage you to have more of a positive outlook. These are easy, and prudent and TEMPORARY measures that can go a long way in producing credible appraisal reports while also protecting appraisers and those they come in contact with.
If you have a brick and mortar office, consider working from home and allowing your employees/contractors to do the same thing. Remote desktop, VoIP, and other technology is amazing and can help all of us with social distancing.
How will this affect the mortgage economy? Again, impossible to say, but I believe a recession is likely the least that will happen. The real estate market in most areas has been climbing for years now (some say at unsustainable rates) and historically, like anything else, markets tend to be cyclical in nature. Many appraisers are busy right now (due to historic low rates), but that will likely not last. Begin now (if you have not already) to prepare for a slowdown in regular mortgage appraisal business. That might mean an increase in other areas such as foreclosure work (like we saw after the 2008 crash) and it might mean something completely different for you. What you do not want to do is wait to prepare. Begin now to grow your other business opportunities.
Some have inquired on the impact this might have on values and whether or not our reports should begin reflecting that. As with anything, the answer to that question can only be answered by you in your specific market. I would not personally make predictions as to how the market might be affected until it is affected, but I would be vigilant in watching the local markets and if the statistics begin to start to show an impact, I would not hesitate to report on those. The market is not coy, and numbers don’t lie. People rely on us and trust us to know and report accurately on the market. We should not let them down.
Most of all, keep your spirits up. It is easy to get involved in the media (social and otherwise) fear and trepidation. It is more prudent to remember the phrase, ‘fear is a great motivator, but a poor decision maker.’ Be aware. Plan ahead. Be prudent. Be positive, and let’s take this one day at a time. Let’s come together as appraisers to assist one another. This too shall pass, and the wise will continue to prosper.
For more information on this subject, please listen to The Appraiser Coach Podcast Episode:
