In Denver’s fast-paced real estate market, a shortage of appraisers is putting the brakes on timely closings, according to industry observers.
“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,” Anthony Rael, chairman of the market trends committee at the Denver Metro Association of Realtors, told the Denver Post.
The Post notes that Colorado had 3,431 licensed and certified appraisers in 2007. That number has dropped to around 2,500 currently. The development is causing closing deadlines to be pushed back and fees to increase.
While the cost to appraise an average home in the Denver area has been around $350 in years past, according to Rael, those fees are nearing $600 – and, according to our experience, have gone as high as $1,000 to include rush fees or incentives.
Why has the number of available appraisers dropped off so precipitously?
The Post traces the current shortage, which has been slowly building in recent years, to the passage of Brexit last summer. The event caused interest rates to drop, sparking a surge in mortgage refinancings. In addition, during the housing crash, many appraisers were forced to find other work and haven’t returned. Meanwhile, regulators boosted licensing requirements.
Some appraisers told the Post they are booked three weeks out. One noted that for each appraisal job he accepts, he turns down 15 to 20.
Unfortunately, the situation isn’t expected to improve any time soon. The Post notes that appraisers, as a group, are aging, with a lesser number of younger people planning to take their place, due to regulations that make it difficult for them to get necessary training.
Bottom line: Expect the home buying process to take a bit longer – and cost more for now.