Tag Archives: appraiser

Denver News: Home Renovation soar in Denver

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In 2014 and 2015, almost seven out of ten Denver homeowners made a home renovation.  That figure put Denver at the number one spot out of 25 cities for home improvements. Over the two years since then, that amount maintained its position  at 69.3 percent according to the American Housing Survey.  It is thought that the cause is rising home prices providing  more equity to homeowners to use on renovations.

The study relates this renovation increase to  job and population growth.  “Both Colorado and Utah have been attracting capital in the technology segment and rapidly adding tech workers.  People tend to do more home improvement projects when they move,” said the spokeswoman for the Home Improvement Research Institute Pam Heidel.

A difficult market could be another cause.   Homeowners may be opting to improve their homes instead of finding a new home which may not be as easy as it was previously.  Also, Denver’s shortage of appraisers could still be a continuing factor.  At the same time, low interest rates would make borrowing  less expensive.

In addition, a study by Lawnstarter suggests Denver homeowners are very satisfied with their dwellings.  They place Denver homeowners as the third happiest in the country.  The only two cities ranking higher being San Francisco and Los Angeles.  This high level of happiness could be a direct result of the increased renovations.

The amount of home renovations Denver is seeing is even pushing estimates for spending on home improvements in the west.  2017 is expected to grow 6% in the mountain region, with Colorado being the driving force.  The other top cities for home improvement include Portland, Phoenix, Kansas City, and Detroit.

How a shortage of appraisers is effecting the Denver home market

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Those looking to buy or sell a home soon should be aware of the trends in the Denver and Boulder markets.  Homes are being bought and sold, but completing a sale is taking longer.   The reason for this change, according to the Denver Metro Association of Realtors (DMAR), is a widespread shortage of appraisers.  The chairman of DMAR, Anthony Rael explained these delays “as a direct result of an appraiser shortage we’ve been talking about the past several months.”

One major concern of the appraiser shortage is the exorbitant costs  the limited pool of appraisers are charging buyers.  In many cases buyers were required to pay over $1,000 to get appraised.  In Anthony Rael’s report he cited an instance where one buyer had to pay $3,000 because appraisers were so overbooked. This was a rare case in which the seller was in a pinch to get appraised before deadlines.  It is a good example of how costly the shortage can be.  The other concern is the risk to the contract as buyers usually incur transaction costs in advance of the appraisal.  Failure to perform appraisal by the deadline is one of the few ways sellers can terminate a contract to buy/sell real estate.

The effects go even further than just monetary costs.  The time it took for homes to be purchased with a conventional loan increased over 10% to 43 days.  The time it takes to purchase with a Veteran Administration (VA) loans, which went up over 25% to 49 days.  Cash transactions saw almost no change at all from the previous year.

Whether looking to buy or sell, the lack of available appraisers is likely to draw out the time it will take to close a sale.