The Property Economics Profession

The Property Economics Profession

In theory, all markets are driven by economic fundamentals, and if we assume that our open market economy will remain intact following the "recession of 2008" and the possible depression that may follow, the same basic economic theories and principals that have applied to the appraisal profession in the past (supply and demand, substitution, balance and externalities) will continue to apply to it in the future.

Professional appraisers have for some time recognized that, although they are valuing different types of assets they all use similar, economics-based analytic techniques, and thus they have a great deal in common. Appraisers as a group, however, have displayed a complete lack of solidarity that has impeded national recognition and national representation.

Real property appraisers were the first to form organizations, the first to have uniform licensing laws established based on a federal mandate in 1989, and the first to create their own uniform standards. Over the past 19 years, and since licensing was first established, the real property appraisal profession has continually revised and refined its ethics and standards.

Like appraisers who complete real property appraisals, business property appraisers have started to move toward licensing that will require specific experience, minimum educational requirements and testing to claim competence. The Uniform Standards of Professional Appraisal Practice (USPAP), developed for real property appraisers, has already formed ethical standards for business and personal property appraisals.

A few years ago the American Society of Appraisers started using the term "property economics profession" to better describe the work of its diverse membership that includes real property appraisers, business property appraisers, personal property appraisers and management consultants involved in the property valuation and consulting business.

The Centre for Advanced Property Economics (CAPE) was formed in 1998 to recognize "a need for different, structured, and more advanced opportunities for professional development. The Centre was created to help appraisers manage change through education, research, and information exchange."

Unification of the profession would likely lead to single designations withing speciality areas that would not confuse the public or require organizational promotion to attain recognition. Everyone without exception accepts and recognizes a CPA (Certified Public Accountant). The appraisal profession should be working toward unification to attain a similar competency and recognition level. It simply cannot be attained in the present environment.

Thus, there are some appraisers who have come to realize that the unification of the appraisal profession could be beneficial. A strong central organization has served other professions well, and there is no reason to believe that appraisers would not also be better off with a combined voice. The fallout from the current banking fiasco may be the catalyst that finally forces appraisers to recognize the importance of unification.