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

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

Owners Overvalue Homes by Larger Margin

For the seventh consecutive month, the gap has widened between what home owners say their home is worth compared to what appraisers say, according to Quicken Loans’ August 2015 Home Price Perception Index.

Home owner estimates now stand 2.65 percent higher than appraiser opinions, the largest gap in more than a year, according to the index.

“The perception trend of most of this year suggests home owners may be assuming that home values have been in a steady, linear path upward,” says Bob Walters, Quicken Loans chief economist. “In reality, home values have remained mostly flat this year, and this false assumption may be leaving home owners disappointed when their appraisals come in.”

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

Is a Neighbor Hurting your Home’s Value?

Next-door nuisances could reduce your home value by 5 percent or more, according to the Appraisal Institute, which spells trouble for the 60 percent of Americans who say they have an issue with a neighbor in a recent survey by Harris Interactive and State Farm Insurance.

A recent survey by Harris Interactive and State Farm Insurance found that 60% of Americans have a pet peeve with someone who lives nearby.

A bad neighbor “can make your life a total nightmare,” says Bob Borzotta, managing editor of NeighborsFromHell.com, whose message boards contain more than 42,700 posts on unfriendly neighbor behavior.

At the extreme, certain next-door nuisances — such as annoying pets, unkempt yards, foul odors, and dangerous trees — could reduce your home value by 5% or more, according to the Appraisal Institute.

Source: http://money.cnn.com/2013/07/01/news/home-value.moneymag/index.html

Americans Say “Buy Now”

With dropping home values in many markets mixed with interest rates at historical lows, homes are more affordable now than they’ve been in the last 35 years, reports Zillow.com.

The average buyer nowadays can expect to spend about 17 percent of her monthly gross income on a mortgage, which compares to a 25 percent average since 1975, Zillow reports.

With affordability high, Americans seem to be getting the message about the value of home ownership. Nearly 70 percent of Americans say now is a good time to buy a home, according to a recent Gallup poll.

Men are about 16 percent more likely to say now is a good time to buy a home than women. And Americans living in the West are most favorable toward buying (75 percent), which compares to 64 percent of Americans who live in the South who say now is a good time to buy.

Americans with higher incomes also expressed more of an interest in home ownership, according to the Gallup poll. Americans who make $75,000 or more a year are 18 percent more likely to say that 2011 is a good time to buy a home than those making $30,000-$75,000.

Source: “Affordability Reaches Generational High,” Realty Times (May 5, 2011) and “Gallup: Time Is Right to Buy,” RISMedia (May 5, 2011) 

 Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

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