Homeowners Expecting Higher Appraisals than They Get

0
73

Sharp Credit – Credit News – Credit Information

Homeowners are and should be proud of their homes, but that often leads them
to think it has a higher value
than does an appraiser and the difference between
the two opinions increased significantly in March.  Quicken Loans says the gap in its Home Price
Perception Index grew by 25 percent compared to February. Part of the
difference might be accounted for by a decline in home prices of 0.20 percent
during the month although prices rose 3.37 percent over the previous 12 months.

Nationwide, appraised values came in 0.78 percent lower than homeowners
expected compared to 0.50 percent in February. Quicken Loans Executive Vice
President for Capital Markets Bill Banfield said that there’s more than one
reason behind this sudden increase in the gap
between estimates and values.

“This month’s fluctuation in the HPPI was driven more by a dip in home
values than a change in the owners’ viewpoint. Homeowners are often reluctant
to believe their house has lowered in value, even at a slight monthly
fluctuation,” he said.  “Depending on the
area, appraised values are either growing at a much more measured pace or have
taken a step back from their meteoric rise. Homeowners are usually slower to
realize change
– in either direction – than the appraisers who study the market
on a daily basis. This can lead to a slight widening of the perception gap when
there is a turn in the market.”

The gap was largest in the Midwest. Homeowners there overvalued their homes
by 0.90 percent while the overestimates were significantly lower in the
Northeast, South, and West at 0.78, 0.76, and 0.70 percent respectively.

Chicago homeowners overestimated the value of their homes, by 1.94 percent.  Boston homeowners, on the other hand, were
most likely to be pleasantly surprised; appraisals come in 2.23 percent higher
than owner perceptions. Los Angeles is the market where the two estimates were
closest; LA homeowners only overestimate by 0.03

Banfield added, “Some of the rampant buyer demand that we’ve seen over the
last few years has subsided because of the affordability issues many areas are
having, driven by a lack of availability,” he said. “Would-be buyers have
decided to sit on the sidelines to see if more home inventory becomes available
at the price-points where they’re shopping. The entire housing industry is
watching to see what will happen
in the coming months – whether owners and
builders will provide the home inventory the buyers have been waiting for, amid
the recent drop in interest rates.”



Original Source