Front Range Real Estate Market Feeling Burn of Appraiser Ahortage

Home appraisals are taking longer to complete and costing more, and that is vexing home buyers, mortgage borrowers, real estate agents and loan officers along the northern Front Range.

“As the Denver real estate market has roared back, we’ve been met with a shortage of appraisers to keep up with the record number of homes that are going under contract and being sold each month,” said Anthony Real, chairman of the market trends committee at the Denver Metro Association of Realtors.

Rael’s research shows that the cost to appraise a standard home in metro Denver, which ran around $350 a few years back, is now costing closer to $600 and looks headed on its way to $800. Some of that increase reflects the rush fees that already overloaded appraisers are charging to meet closing deadlines.

Closing deadlines are getting pushed back because of the appraiser shortages and complicating life for buyers and sellers alike, and in some cases causing tempers to flare, Rael said.

“It is worse than you know,” said Lou Barnes, a veteran loan officer with Premier Lending Group in Boulder. “There are simply fewer appraisers. We are running into a time-versus-price auction.”

The tightness became noticeable when the metro Denver housing market started heating up again in 2013. But the breaking point came this summer when the Brexit vote caused interest rates to plunge, setting off a surge in mortgage refinancings in the middle of the peak home selling season.

Appraisers, booked solid, charged premiums to get the work done and the level of desperation grew.

Warren Boizot III and Ned Garber both work seven days a week, 12 hours a day with their Denver firm BLG Appraisal Group, taking only two weeks off a year for vacation to recharge and a day now and then to attend courses to stay on top of their craft.

They have followed that crazy schedule, winter and summer, since 2013, motivated by memories of the housing crash where work was hard to come by.

“We are working as hard as we can,” said Garber, who is quick to add he isn’t complaining.

The appraisers said they are booked three weeks out. If someone wants to get in faster, they and other appraisers charge a fee, which irks some in the real estate industry. But if they promise a delivery date, it is as good as gold.

“It is a grind. Some day I will wish I had a Sunday off,” Boizot said.

Boizot said for every appraisal he accepts, there are about 15 to 20 that he turns away, either because the timing doesn’t work or the customer doesn’t want to pay a rush fee.

He uses the analogy of someone needing to see a dentist on short notice for a hurting tooth. Dentists book patients months ahead, but can keep the office open late on short notice at an added cost.

As with so many things wrong about today’s real estate market, the problems go back to the housing boom and bust. When the housing market came to a screeching halt, a lot of appraisers had to find other work to survive.

Regulators cracked down, trying to create distance between those requesting appraisals and those doing them and they boosted training requirements and the amount of time it took to do an appraisal.

Licensed appraisers must have an associate degree or 30 credits of college coursework and take 150 hours of appraisal-related courses. Certified appraisers, a step up, need a bachelor’s degree or equivalent.

Back in 2007, Colorado had 3,431 licensed and certified appraisers, but this year that count is running close to 2,500, said Eric Turner, education, communication and policy manager with the Colorado Division of Real Estate.

Not only are there fewer appraisers, but as a group they are getting older, with an average age nationally of 53. And hardly any new ones are coming into the fold in Colorado, even though work is plentiful.

Last year, the state issued just 52 new licenses or approved an upgrade of a licensed appraiser to certified. This year, the number of new entrants or upgrades is running around 37.

“Out of that 52, more were upgrades than new licensees,” Turner said. Contrast that with the loss of about 100 appraisers a year on average in Colorado since 2007.

So why aren’t more college-educated and underemployed millennials rushing into the field?  To obtain a license, an appraiser must spend 2,000 hours in an apprenticeship over the course of a year or more with an experienced appraiser. A certified appraiser must spend 2,500 hours across two or more years.

The only way to become an appraiser is by doing appraisals, and there’s the rub.

Garber and Boizot said they are so busy, they don’t have time to train anyone. Even if they did, they don’t know of a noncompete agreement strong enough to keep an apprentice in this market from walking out the door with a year’s worth of training on their dime.

“No one wants to take an apprentice under their wings,” Garber said.

Not only are there far fewer people doing appraisals, each appraisal takes much longer to complete — about six to eight hours on average — and the penalties that come with getting it wrong are much higher.

“The way the system has changed, it is becoming more cumbersome and less profitable,” said Thomas Raff,  a certified appraiser in Westminster. “The report is more comprehensive now than it has ever been. It takes much more time.”

Trying to pin down values in a rapidly moving market like Denver’s is a more complicated task than working in a flat and stable one, which in turn exposes appraisers to more risks if they get it wrong.

“The analysis of comparables is a black art and very valuable,” Barnes notes.

Buyers, after getting repeatedly outbid, can become so desperate to win that they make inflated offers above already elevated list prices, leaving appraisers to absorb their wrath when the valuation comes up short.

“My job is not to hit that contract price,” Garber said. “We are not obligated to hit that number.”

Coming in low, if anything, actually is more time-consuming, in that it requires dealing with more complaints. But appraisal objectivity is an important line of defense in protecting the financial system, he said.

Boizot said one change that could go a long way toward making the home sales process more efficient would be basing the list price on an actual appraisal, rather than an agent’s estimate.

Appraisals are one of the last pieces to fall into place, and buyers and sellers rush toward a closing. Any kind of delay further up the chain often shortens the time appraisers have to get the job done, he said.

Housing sales are already leveling off as summer moves into fall and a slowdown could become a more permanent feature. If mortgage rates rise, that too could put a dent in demand for refinancings.

Still, the more pressing problem of not enough appraisers working the craft remains.


Denver Real Estate Market One of 10 Most Stable in U.S. in 2016

The Denver, Colorado real estate market is currently one of the most stable in the nation, according to a recent ranking by SmartAsset. Boulder and Fort Collins were ranked #1 and #6, respectively.

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Spring Has Sprung for the Denver Area Housing Market Prices Reach All-Time Highs, Inventory Levels Increase

GREENWOOD VILLAGE, COApril, 7 2016 – The latest data from REcolorado, the provider of, a  home search site for Colorado home buyers, sellers and renters, reveals that home sales prices have reached another all-time high. Demand remains strong, with home sales seeing an impressive 39 percent jump from last month.

All month-over-month comparisons indicate the housing market for the Denver Metro and surrounding area is holding strong, thanks to an influx of new listings that boosted the number of homes for sale. At month end, inventory levels were up 10 percent as compared to last month and six percent year over year. Still, weeks of inventory remained at six, meaning it would take just six weeks to deplete existing inventory if sales continued at the same pace.

The average price of a Denver-area home continued its steady upward trend, reaching a record high of $387,547. Average sales price increased four percent month over month and nine percent year over year.

“Continued low interest rates combined with an undersupplied market put Denver-area home listings at a premium,” said Kirby Slunaker, president and CEO of REcolorado. “For those who have ever considered putting their home on the market, now is about as good as it gets.”

March home sales showed a 39 percent increase as compared to February. With 4,111 homes sold, sales were down 11 percent as compared to last year at this time. March ended with 6,083 homes under contract, 15 percent higher than last month.


Walk On Wood

Hardwood flooring is one of the most sought-after features in new and existing homes. This eco-friendly feature can turn your home into a warm and inviting space to relax and entertain. Selecting the right flooring can be a challenge, however, depending on your design style, budget and personal preference. Before choosing a wood floor for your home, here are a few things to keep in mind, courtesy of the National Wood Flooring Association:

There are two basic types of wood flooring. Solid wood flooring can be sanded and refinished many times and can be used in all rooms, including kitchens and powder rooms. Engineered wood is manufactured with multiple layers of wood veneers, so it expands and contracts less than solid wood flooring when temperatures and humidity fluctuate. Engineered wood is a better alternative for basements and other below-ground living areas.

Hardwood floors come in different finishes. Satin gloss offers the most shine and reflects the most light, so scratches and normal wear and tear are less noticeable, while matte finishes offer the least shine.

Light woods like ash or maple help make a room appear more open and airy, while darker woods like walnut or mahogany can give a room a more stately and refined appearance.

To keep floors looking new, clean them frequently using a dust mop or vacuum. Avoid using a wet mop as water can dull the finish or damage the wood over time. To prevent scratches, place scatter rugs at all entrances and floor protector pads on the bottom of furniture legs.

When spills occur, wipe them immediately with a dry or slightly damp cloth. When floors begin to look dull, use a wood flooring cleaner to renew the luster. Use only products that are compatible with your wood floor type. The wrong cleaning product can damage the finish and possibly the wood itself.

With these simple tips in mind, hardwood floors can provide comfort and enjoyment for many years.


Colorado’s Home-Price Pressure Eases With Influx Of New Listings

The inventory of new home listings in metro Denver jumped up 12.8 percent over the same period last year in July, creating some breathing room in a market that has remained constricted for several months.

In July, there were 7,494 new listings for houses and condos on the market, according to the latest report from the Denver Metro Association of Realtors. The number of new listings also represents a 5 percent increase from June, when there were 7,131 new listings on the market.

The increase in the number of homes available put some downward pressure on the average price of a home in metro Denver, which spiked above $400,000 earlier this year.

The average price of a single-family house in the metro area dipped by 1.8 percent month-over-month to $412,996, while the average price for a condo decreased by 1.9 percent from June to $254,513.

“The Denver-area’s overall real estate market was showing signs of ‘easing up’ or ‘cooling off’ as we entered the prime home-buying season, and some sellers were beginning to sense a slight shift in the market,” said Anthony Rael, chairman of the DMAR Market Trends Committee.

“This is all welcome news for homebuyers who have survived the recent months of our market frenzy. Even with the most recent decline in average and median sales prices, sellers have done remarkably well by realizing double-digit price appreciation in our year-over-year analysis,” Rael said.

But year-over-year, home prices are still up.

The average sold price for a house is up 9.8 percent from last year, when houses sold for $376,101 on average, and condo prices are up 13.9 percent from last year’s average of $223,454.

“The number of available homes for sale has been steadily increasing throughout the year, a positive sign for buyers as we head into the second half of the summer selling season,” said Kirby Slunaker, president and CEO of REcolorado. “We’ve seen prices stabilize over the last several months, which suggests the market is finding more of a balance.”

Homes are spending even less time on the market than they have been, with the average number of days on market for a home in the metro area dropping to 20, down from 23 in June and from 28 in July 2014.

Colorado yet again led the country for home-price appreciation, according to the latest report from Irvine, California-based CoreLogic, which said earlier this week that home prices appreciated 9.8 percent year-over-year in June, faster than any other state.


How High Can the Denver Housing Market Climb in 2016?

“As home values continue to rise, buyers are faced with more challenges in a tighter market, especially in hot markets like Denver…” -Zillow press release, July 30, 2015

Are you thinking about buying a home in Denver, Colorado? If so, you might want to think about purchasing sooner rather than later. Home prices continue to climb higher in the Mile-High City, and they don’t show signs of reversing course anytime soon.
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Average Home Price In Metro Denver Tops $390K

The average price of a home in metro Denver increased to $390,067 in February, up from $326,958 in February 2014.

The increase of 19 percent year-over-year includes both single-family houses and condominiums, according to the latest data from the Denver Metro Association of Realtors.

Average prices were likely impacted by continued strong demand in the housing market, including the luxury market of homes priced at $1 million and above, 84 of which sold in January and February in the metro area, compared with 56 for the same period last year, a 50 percent increase.

Median home prices also increased, to $329,000 from $280,000, a 17 percent jump.

Demand in all price segments remains high, with millennials in particular entering the market, DMAR said. Interest rates hovering near March 2013 lows are also keeping buyers in the market.

“As year-over-year housing prices continue to increase, home affordability is going to become a greater issue as the entry point for first-time buyers grows higher and higher,” said Anthony Rael, chairman of DMAR’s Market Trends Committee. “The continuation of a strong job market in Colorado will hopefully offset the drag from an expected increase in mortgage rates this summer.”

Active listings of single-family homes and condos combined on the market dropped again in February, to 4,079 from 6,103, a 33 percent drop. Separately, the number of single-family homes on the market fell by 31 percent to 3,338 in February and the number of condos on the market fell by 41 percent to 741.

But the number of new listings increased for single-family homes and condos in February, by 2.7 percent from 3,004 in 2014 to 3,087 this year.

These new listings demonstrate increased willingness from sellers to put their homes on the market, which is a good sign for easing the inventory shortage, but it’s still not enough to bring prices back down.

“We’re seeing an impressive number of new home listings come on the market this year as sellers begin responding to consumer demand,” said Kirby Slunaker, president and CEO of REcolorado, the multiple-listing service formerly called Metrolist.

“Even with the increase in new listings, our historically-low inventory levels remain the biggest challenge facing the Denver-area housing market, as they are undoubtedly contributing to rising average home prices and reducing the amount of time homes are on the market,” Slunaker said.

Earlier this week, a report from Irvine, California-based CoreLogic showed that Colorado led the nation in home-price appreciation in January, with Denver’s appreciation reaching even higher than the state as a whole.