Real Estate Trends: Key Valuation Insights & Market Shifts
In this issue:
- Comprehensive Benchmarking: Income/Expense IQ offers real-time, nationwide data analysis across 4,800+ property data points for accurate market assessment.
- FHA Rescinds ROV Policy: Agency reverts to prior appraisal appeals process.
- Hotel Valuation Trends: Hotel News Resource examines how cap rates and revenue multipliers impact limited-service hotel valuations.
Insights
FHA Rescinds ROV and Fair Housing Appraisal-Related Policies
The Federal Housing Administration (FHA) issued Mortgagee Letter 2025-08 on March 19, announcing the immediate rescission of several appraisal-related policies. As part of this decision, the FHA is restoring or reverting to prior policy language concerning second appraisals, appraisal quality, and Reconsideration of Value (ROV) protocols, which had been updated in previous policy changes.
The decision follows a review of recent updates to the Uniform Standards of Professional Appraisal Practice (USPAP) Ethics Rule, which addressed issues that were previously targeted by FHA. While the rescinded policies were initially designed to improve borrower experiences and ensure fair housing compliance, the FHA cited implementation challenges and the desire to reduce regulatory obstacles as key factors in their decision to revert to prior guidelines.
The ROV policies, which were initially adopted by FHA, were widely adopted across several other agencies in the form of guidance and seller-serviced guidelines. However, it remains unclear at this time how these other agencies will respond to the FHA’s rescission and whether they will follow suit in altering their ROV policies.
The rescinded Mortgagee Letters include ML 2021-27, 2024-16, and 2024-07.
Your Benefits
Income/Expense IQ
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Opportunities in IRS Appraisals: What the Sunsetting of TCJA Could Mean for Appraisers
April 3, 2025
12-1pm EST
It is very likely that demand for valuations for estate planning will soar if Congress does not take action to extend or make permanent the Tax Cuts and Jobs Act (TCJA) of 2017. The TCJA will expire, or “sunset,” on December 31, 2025, if no action is taken, and the federal estate and gift tax lifetime exemption will revert from $13.61 million per individual or $27.22 million per married couple (in 2024) to its pre-TCJA level of $5.6 million per individual, adjusted for inflation from 2017.
This webinar aims to provide a high-level overview of changes in the IRS code involving estate tax and planning and how that can define an appraiser's scope of work. Our expert panelists will discuss common errors and insufficiencies in appraisals and how reports are reviewed upon audit. Gain tips about how to solidify your appraisals to minimize any issues upon review.
Panelists:
Eric Garfield, MAI, Cushman & Wakefield
Priya Royal, Esq., Royal Law Firm, PLLC
Justin Sok, Rich Feuer Anderson
Advocacy Updates
State Legislative Sessions in Full Swing
With the 2025 legislative sessions underway, the Appraisal Institute is tracking over 50 bills impacting appraisal practice. As part of its One Advocacy approach, AI is advocating for or against certain bills and suggesting amendments.
Key legislation includes:
- Arkansas: Updates appraiser licensing laws and removes certain membership requirements for board members.
- Colorado: Establishes a five-year statute of repose for civil claims against appraisers, with exceptions for fraud and fair housing claims.
- Massachusetts: Addresses USPAP recordkeeping, appraisal management licensing, and mandatory licensing for appraisers.
- Maryland: Expands appraisal scholarships, removes degree requirements for appraisers, and introduces a reconsideration of value process.
- Minnesota: Increases appraisal cost reimbursements in eminent domain cases and mandates use of a disciplinary sanctions matrix.
- Mississippi: Would have restricted property data collection to appraisers but failed in committee.
- Montana: Proposes a five-year statute of repose for appraisal-related claims.
- New Jersey: Targets fair housing issues, mandates PAREA adoption, and enforces penalties for discriminatory appraisals.
- New York: Relates to antidiscrimination rules in appraisals and expands penalties for violations.
- Oklahoma: Requires appraiser invoices to be included in reports and prevents removal by management companies.
- Virginia: Mandates fair housing education for appraisers and establishes a task force on appraisal equity.
For more information on any of these issues please email governmentrelations@appraisalinstitute.org.
Real Estate Horizons
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Our Community
LDAC Registration Slots Available
A few spots remain available for the 2025 Leadership Development and Advisory Council meeting on May 14-16 in Washington, DC. LDAC fosters creative thought from talented real estate appraisal professionals, generating future leaders of the Appraisal Institute. LDAC has served as a source of leadership and as an inspiration for new programming ideas for the Appraisal Institute since 1969. Through a series of roundtable discussions, LDAC provides a forum where ideas and opinions on targeted topics of concern to the appraisal profession are exchanged.
Until next week,
Team Appraisal Institute
