Post Event Summary
The housing market remains a drag on the U.S. economy, and according to panelists at an event cosponsored by AEI and the Collateral Risk Network on Wednesday and Thursday, current appraisal practices are part of the problem.

Several panelists highlighted the issues with the current system. Stephen Oliner of AEI presented data indicating that land values are the most volatile element of the housing bubble cycle. Ed Pinto of AEI outlined government policies that forced the abandonment of fundamental lending principles, which would warn of an impending housing boom. Others argued that Fannie Mae appraisal forms are outdated and are preventing appraisers from performing effective analysis.

A wealth of specific -- and often, emphatic -- calls for reforms that would address these issues emerged from the conference. Morris Davis of the Wisconsin School of Business demanded access to the data warehouses at Fannie Mae and Freddie Mac to enable more accurate appraisals and eliminate duplication of efforts. Jordan Petkovski of Quicken Loans stressed that appraisers are frustrated with all talk and no action and emphasized the need for cooperation between mortgage lenders and policymakers to move forward.

Michael Sklarz of Collateral Analytics focused on how appraisers can use data to more accurately select comparable properties at a neighborhood level instead of looking at aggregate prices across a wide area. Representatives from the appraisal industry noted that the industry needs to universally accept a broad range of values, produce a confidence score for data and create a national repository of real property data.

Other experts suggested that the American housing sector could learn from Germany, which has kept its housing market stable by creating an industry of highly qualified appraisers and instituting a culture based on credit. Pat Sheehy of Chase Home Mortgage concluded the conference by stressing that the entire housing industry must collaborate to restore confidence and stability in the housing market.

Financial housing market stakeholders agreed that the ideas shared during the conference need to be fashioned into a detailed implementation plan for the housing industry to regain market confidence.
--Emily Rapp

Event Description
What role have appraisers played in the U.S. housing crisis? Appraisers didn’t directly cause values to decline, nor did they lead homeowners to stop paying their mortgages. However, as we examine the housing boom and bust, it is clear that the appraisal process failed to distinguish between housing prices and values. 

Determining the price at which a property may be sold or refinanced is quite different than providing a value analysis that helps lenders determine the maximum amount that may be prudently lent on a property. This conference will bring together researchers, appraisers, lenders, investors, analysts, regulators, rating agencies, trade groups and policymakers to discuss best practices that are consistent with sustainable market values.

All presentations are at the bottom of this page.