CRE appraisals market slowed further in the third quarter
In the third quarter of 2023, commercial real estate appraisal awards fell 9 percent from the second quarter and 36 percent year-over-year, says LightBox in its CRE Market Snapshot Q3 2023 report, which focuses on trends in the appraisal sector.
Appraisals are down as the higher-for-longer messaging from the Fed has led many lenders into an “extend to the end” strategy, as they try to extend loans to the end of this rate hike cycle.
Loan maturity concerns and geopolitical uncertainty and conflict have also added further impedance to the number of commercial real estate appraisals taking place, says the report.
LightBox’s CRE Activity Index registered at 85.5, down from 88.3 in the second quarter and from 107.3 a year ago.
Requests for proposals (RFP) from banks to appraisal firms to bid on projects dropped 38 percent year-over-year and 14 percent from the second quarter.
LightBox noted that the drop in RFPs “is consistent with the