Now Is the Right Time for Appraisers: Retooling for Your “Green” Future
Grant Austin, MAI, MMRS, M.S., MRICS
Many of you will remember the excesses that characterized the real estate market of the 1980s that led to requiring state certification of real estate appraisers in 1989. Many at the time said that “the party is over” in real estate.
With the current global economic crisis, we know that the lending frenzy and skyrocketing real estate prices of the past few years are once again over, as is the volume of our appraisal work. At this point in time, there are a couple of choices for appraisers.
You can lay low for the next few years until the market rebounds, surely it will rally back in time, just the same as it has before. The words of calm and comfort, because they have worked for us before, are “we will wait out the storm.”
Alternately, you can envision this hard time as an opportunity to position yourself with a slightly modified appraisal practice in the near future. Your modified appraisal practice will emerge as one of the few that is qualified to value properties with “green” characteristics. Two historic changes are occurring. First, the built environment is embracing green building, both residential and commercial. Last October over 30,000 attended the International Builders Show in Las Vegas where green building was embraced as everyone realized that the future of building will look a lot different than yesterday or today. And second, there can be no doubt that President Obama will direct billions of dollars to all that is “green” (housing, development, and energy). This one-two symbiotic combination will result in a recovered economy for appraisers and will favor the specialists who are positioned to competently appraise properties with green characteristics.
We are not talking about simply applying an adjustment for solar panels. The appraisal world of sustainable development requires new terms, new concepts, many new appraisal considerations, and new valuation techniques. The appraiser who is positioned at the forefront of this new built environment will not only comply with USPAP’s Competency Rule, but will be in a leadership position to: a) market yourself and your new specialty for a competitive advantage, and b) use your specialist knowledge to open up vast new sources of work (for example, architects will bring appraisers into their Building Information Modeling and Integrated Delivery Process – methods that you will need to be familiar with for your new specialty).
If your choice is to become well positioned to grow when the economy recovers, here are a few ideas for you to consider . . .
1. Appraisers who find ways to improve their knowledge now will be at a competitive advantage when the economy recovers.
2. New market dynamics and a shift to green building will increasingly dominate the built environment.
Consider your local community college or university courses in sustainability, ecology, and the environment. These courses will serve all appraisers well for a general understanding of the complex and interdisciplinary issues faced in sustainable development, plus these courses are modestly priced (often $50 to $150) and require a minimal investment of time. Retooling will likely not be adopted by many if it requires a significant expenditure of time and/or money.
Consider courses and webinars by the USGBC (www.usgbc.org) at roughly $60 to $200 per course. Although not specific to real property valuation, the courses provide an important and affordable grounding in sustainable building and development characteristics.
Consider the program and credentialing offered by the Institute of Green Professionals (IGP @ www.instituteofgreenprofessionals.org). The Institute is the leading education and credentialing membership organization for sustainable development professionals and academics (architects, land-use planners, engineers, appraisers, accountants, landscape architects, attorneys, including those involved in CSR ). IGP offers a comprehensive course in Sustainable Development Literacy and specialty courses for each member’s area of practice. The Institute’s designations, including access to all courses is only $229 for professionals and $109 for full-time academics (excluding texts). Many of the world’s recognized leaders in sustainability are members of the IGP.
In conclusion, the good news is that while you weather the current economy and without significant capital and time expenditures, you can position yourself to be a highly qualified and credentialed “green” building specialist in our rapidly changing built environment.
About the Author
Grant Austin, MAI, MMRS, M.S., MRICS is the President of the Institute of Green Professionals. Grant is an appraiser, author, university lecturer, and researcher in sustainable development valuation and life-cycle property analysis. He has served on government, university and private advisory boards, both nationally and internationally and is currently on the EU Advisory Group on Sustainable Property Investment and Management for the Royal Institution of Chartered Surveyors.