Homeowners and appraisers are gradually seeing more eye to eye when it comes to home values. The latest Quicken Loans Home Price Perception Index shows that appraised home values in October were an average of 0.99 percent lower than homeowners’ expectations.
That’s much better than it has been in the last two years, as rapid run-ups in home prices across the country have caused homeowner and appraiser perceptions to become misaligned. Over the last five months, the gap between those perceptions has been narrowing, and Quicken Loans’ latest HPPI is the closest to equilibrium since April 2015.
However, in some cities, homeowners and appraisers still have widely differing views on home values. Appraisals tended to surpass homeowner estimates in Western cities; they were 3.13 percent higher than homeowners expected in Dallas, for example. On the flip side, homeowners in the East and Midwest were most likely to see appraisals below their expectations.
“Based on the HPPI, it appears homeowners in the markets where prices are rising faster than the national average—such as Denver, Seattle, and San Francisco—are continuing to underestimate just how quickly home values are rising, so the average appraisal is higher than homeowner estimates,” says Bill Banfield, executive vice president of capital markets at Quicken Loans. “On the inverse of that, homeowners in areas where the values aren’t rising as fast may think they are rising faster than they are, leading to the appraisal lagging the estimate.”
Source: Quicken Loans
