For banks trying to keep real estate-secured transactions moving, appraiser capacity is becoming harder to ignore.
A recent ProSight article by retired FDIC appraisal subject matter expert Beverlea Gardner points to a market that looks increasingly strained. Since the number of appraisers peaked in 2007, productivity gains and generally steady loan demand have helped absorb some of the decline. But Gardner argues that the underlying trend still matters, especially because appraiser capacity does not rebound quickly. New entrants need years of education and experience before they can independently complete assignments that comply with Uniform Standards of Professional Appraisal Practice (USPAP), which means supply can lag badly when loan demand rises.
Here are a few practical takeaways:
Look past the headline numbers. Gardner notes that the number of certified general appraisers increased just 0.1% from 2020 through 2025, while commercial real estate loan volume at all commercial banks grew 0.6% over the same period. But credential counts can overstate real capacity because many appraisers hold licenses in multiple states. When adjusted to count unique certified general appraisers rather than total credentials, the number declined by more than 20% over the past five years. Some appraisers also are no longer actively producing reports.
Use appraisers where their expertise matters most. Gardner’s advice is to use “more carrots, less stick.” That means paying well for strong appraisal reports, respecting reasonable turn times, and relying on appraisers for complex or atypical properties where experience and judgment matter most. Pushing unnecessary rush jobs may hurt report quality and add to burnout.
Use alternative valuation products where the rules allow. The article urges lenders to take advantage of regulatory exceptions and use evaluations or validations for qualifying loans, especially smaller-dollar transactions and certain renewals. Gardner also stresses the importance of working with vendors that use technology to deliver compliant products efficiently—not “low-cost, low-quality” alternatives that may create regulatory issues later.
Focus reviews on what actually matters. Gardner recommends applying materiality tests in the review process. Instead of chasing every typo or stylistic preference, lenders should focus on legal errors, bias or discrimination concerns, and mistakes that materially affect value. Minor issues can be noted without triggering another round of revisions.
Build the bench before you need it. Start early to develop a deeper pool of appraisers, rather than waiting until turn times worsen or demand spikes. Gardner’s suggestions include seeking out not only proven appraisers, but also newer entrants, while using internships and thoughtful vendor management to strengthen the pipeline over time.
The larger message: Banks may not be able to solve the appraiser supply issue, but they can do a better job of protecting turn times, managing risk, and using scarce valuation resources more intelligently.
