NATNews Blog > February 2016 > Homeowner expectation of value nearing appraiser valuation

    Homeowner expectation of value nearing appraiser valuation

    2/11/2016 10:10:37 AM
    Quicken Loans said average home appraisal values in January were 1.75 percent lower than what homeowners were anticipating, according to the company’s Home Price Perception Index. This continues the trend of nearing equilibrium between expectations and actual appraisal values.
     
    Quicken Loans said average home appraisal values in January were 1.75 percent lower than what homeowners were anticipating, according to the company’s Home Price Perception Index (HPPI). This continues the trend of nearing equilibrium between expectations and actual appraisal values.
     
    While the HPPI is narrowing, home values experienced a small pullback in January. According to Quicken Loans’ National Home Value Index (HVI), values decreased 0.42 percent since December, although year-over-year growth continued with an increase of 3.37 percent.
     
    Home Price Perception Index

    Homeowners across America are understanding their home’s worth more, as the gap between homeowner estimates and appraiser opinions narrows. The national HPPI showed the average appraisal was 1.75 percent lower than what homeowners expected.

    While January was the fifth month the National HPPI moved closer to equilibrium, the homeowners and appraisers in many metro areas still do not see eye-to-eye. This is particularly true in the west where homeowners are continuing to underestimate the value of their home as they struggle to keep up with rising home values. 
     
    “It’s always important to understand your local real estate market,” said Quicken Loans Chief Economist Bob Walters. “If home values are growing in the area, homes may be gaining equity faster than consumers realize. On the other hand, if the local market is struggling, the appraisers – who are most aware of home value changes – may recognize this before homeowners come to terms with reality.”
     
    Home Value Index

    Quicken Loans’ HVI, the only measure of home values based solely on appraisals, showed home values experience a slight dip in January. Home valuations decreased 0.42 percent since December, according to the national HVI, although appraised values rose 3.37 percent since January 2015. Regionally, the western and southern areas continued modest annual gains, while the Northeast and Midwest showed small declines in both monthly and yearly measures.
     
    “Home valuations continue to rise as the economy strengthens and buyers find homeownership often cheaper than renting,” Walters explained. “The number of potential homebuyers outpaced sellers in some markets. On the other hand, some areas are more balanced, producing slower grow or even a slight decline in some months. It is important to remember that tepid growth is not a cause for concern, but rather a sign of a healthy and sustainable market.”
     
    To read more and view statistical graphs, go to www.quickenloans.com.