Owners Question Appraised Values: Too Low?

Homeowners say their homes are worth more than what appraisers say they’re worth, and the gap between the values is growing, according to Quicken Loans’ latest Home Price Perception Index.

Appraisals, on average, were 1.77 percent lower than what homeowners expected, according to the index. This marks the fourth consecutive month in which the gap between homeowner estimates and appraiser opinions has widened.

That said, appraisals are showing higher values than what homeowners expected in some of the hottest housing markets, mainly on the West Coast, according to the index reading for March.

Source: Quicken Loans

Home Owners May Be Too Upbeat About Prices

Home owners may be slightly too optimistic about their home’s value compared to what appraisers say it’s actually worth. Home values are, on average, about 2.17 percent lower than what home owners expect compared to appraisers’ estimates, according to Quicken Loans’ latest Home Price Perception Index (HPPI).

The gap between home owner expectations and appraisal estimates widened in March. In February, appraisals were 1.99 percent lower than what home owners expected.

“The varying HPPI values across the country illustrates the importance of examining the market at the local level,” says Quicken Loans Chief Economist Bob Walters. “If home owners are eyeing that new home being built across town, they could be pleasantly surprised how much their home will sell for – or in some instances their equity may not take them as far as they think – depending on what area of the country they’re in. … It’s not always easy for home owners to keep their finger on the pulse of their equity.”

Source: Quicken Loans

Home Owners Overestimate Their Equity

The amount home owners estimate their home is worth is growing out of proportion with appraisers’ estimates, with the gap widening for the first time in six months, according to Quicken Loans’ latest Home Price Perception Index.

On average, appraisers’ estimates were about 2 percent lower than what home owners expected in February. The Quicken Loans study compares actual appraised values to what home owners who are refinancing estimate their home is worth at the beginning of the mortgage process.

Appraisers’ estimates were most often higher than home owners’ in the Western region of the country.

Source: Quicken Loans

Owners Still Overvaluing Homes vs. Appraisals

Home owners are still slightly overvaluing their homes compared to appraisers’ estimates, according to the latest Quicken Loans Home Price Perception Index. In December, average appraised values were 1.8 percent lower than home owners’ opinions of their homes’ values. That marks the 11th consecutive month where appraised values were lower than home owners’ expectations — but the gap is narrowing.

“The narrowing of the perceived-versus-appraisal value gap is an excellent way to end the year,” says Quicken Loans Chief Economist Bob Walters. “The more home owners are in line with appraisers and understand the equity in their home, the easier it will be to refinance their mortgage. In the same vein, if home buyers understand how the local market is performing, they will be better equipped to come in with a strong offer on the home of their dreams.”

Source: Quicken Loans

Appraisers, Owners Out of Sync on Home Values

Home owners may be increasingly overvaluing their homes. Appraiser opinions of home values were 2.33 percent lower than home owners’ estimates in July, according to Quicken Loans’ national Home Price Perception Index. The gap between home owner estimates and appraiser opinions were nearly double the gap between the values in May.

“Many home owners around the country are seeing the national headlines about home value increases and they are optimistic about their equity increasing,” says Bob Walters, Quicken Loans chief economist. “While some areas are seeing the same level of home appreciation, or even more, there are also some areas that have slower home value increases. This can lead to home owners and appraisers not quite seeing eye-to-eye.”

“A slowing of home value increases adds to the misunderstanding of local home values,” Walters says. “Appraisers are viewing the housing industry every day; they know when home values growth may be slowing. Home owners may think values are still skyrocketing, when they have instead returned to more healthy appreciation in their area.”

Source: Quicken Loans