Commercial Appraiser Market Survey June 2020

See what our survey results are for June of 2020.
Commercial appraiser market survey
Jeff Weiner

Jeff Weiner

CEO & Co-Founder | Transforming Commercial Real Estate Valuation | B2B SaaS Product Innovator | Creating Amazing Software from Zero to Scale | Longevity Enthusiast

Related Resources

Commercial Appraiser Market Survey June 2020

Back in March and April, realquantum polled our community of readers to gain an understanding of the commercial appraiser industry outlook. Because of the coronavirus pandemic’s unpredictability, we sent a third round of the commercial appraiser market survey last month. The results were mostly from the US and show some movement, but most notably, that the market is going to take time to get back to where it once was.

Appraisal Activity

Firstly, almost 70% of respondents said their business was changed by the pandemic. Though that is a large number, this percentage is down a bit from April’s survey where 83% said they were being affected. Also dropping is the number of people who said their business was much slower than normal (only 28% compared to 44% in April). 10% of people even reported being much busier than normal, which is up from the 2% in April.

Many respondents attributed increases to their business to low interest rates causing a hot market. Some even noted that while they are busier than usual, COVID-19 is also affecting client expectations. Clients are forced to be more flexible with delays due to closings.

Has COVID-19 affected incoming orders?

commercial appraiser market survey

If so, how?

commercial appraiser market survey

Exterior-Only Inspections

Certainly, clients prefer appraisers do both interior and exterior inspections. Due to federal and state mandates, interior inspections haven’t been an option for some appraisers. The number of clients who have accepted exterior-only inspections has only risen slightly from 68% to 70%. This coming after multiple updated mandates from Fannie Mae and Freddie Mac since March to permit more exterior-only inspections.

Surveyors also noted the following inspection-related issues:

  • exterior-only inspections are reducing credibility
  • being unable to get an inspection scheduled at all
  • opting-out of interior inspections due to having high-risk family members
commercial appraiser market survey

BOOK A DEMO TODAY

Specific Changes in Market Activity for COVID-19

Meanwhile, surveyors noted the specific market activity they have observed. In short, 43% blame COVID-19 for leases that are either terminated or being renegotiated. This is up from 31% in April. Also on the rise was the percentage of surveyors who blame the pandemic on halting construction projects (52%).

As noted in May, the pandemic is causing new construction, as well as existing building owners to rethink their amenities to allow social distancing. Further, the rollout plans in cities and states across the US are also causing tenants and employees to take a pause. Though some cities, like New York, are now able to be at 50% capacity in commercial offices, people are not going back to the office. The commercial appraiser industry outlook seems to be one big question mark.

Observed pending SALES terminated or renegotiated due to COVID-19?

commercial appraiser market survey

Observed pending LEASES terminated or renegotiated due to COVID-19?

commercial appraiser market survey

Observed pending FINANCING withdrawn or renegotiated due to COVID-19?

commercial appraiser market survey

Observed proposed CONSTRUCTION projects put on hold in your market due to COVID-19?

commercial appraiser market survey

Real Estate Values Impacted by COVID-19

There was virtually no movement in the commercial appraiser market survey results when it came to commercial real estate values. About 55% of people said the value of commercial real estate has dropped in their market since the pandemic, which is the same as back in April. However, there was movement (in the right direction) in residential values. When asked, only 16% said the value of residential real estate has dropped due to COVID-19. This is a decline from 32% in April.

Residential

commercial appraiser market survey

Commercial

commercial appraiser market survey

When Does it Get Better?

We asked how long it might take for the market to return to pre-COVID-19 conditions. Similar to April results, the results were staggered. However, in April, the majority of people (26%) felt it would take only 9-12 months for the market to return to pre-COVID-19 conditions. In June’s survey, the majority (29%) are estimating it will take 15+ months for the market to return. Following were those who feel the conditions will revert back in 9-12 months or 12-15 months. While no one can be sure, the results say that sooner, rather than later, doesn’t seem likely in this case.

When looking at property types most impacted, both Lodging and Retail remain the hardest hit. Industrial, followed by apartments were rated the least impacted by COVID-19, while Office buildings landed right in the middle.

commercial appraiser market survey
commercial appraiser market survey

What We Can Count On

Market conditions are going to continue to change, especially as states continue rolling out in phases and pulling back when deemed necessary. People are going to continue to be out of work and requiring assistance. The general consensus of the commercial appraiser industry outlook was that while there was some positive movement, what the market really needs is time. As for commercial appraisers, they will continue looking for how to get more productive during this pandemic and prepare themselves for the future, whatever it holds.

Check out the survey we did in April, 2020 for a comparison on how fast things have changed.

FEATURES

Schedule a Demo Today

See these features in action with a free live demo.