Homeowner perceptions of property value in July were 2.33% higher than those of appraisers, according to Tuesday’s release of Quicken Loans Home Price Perception Index (HPPI).

Meanwhile, our Home Value Index (HVI) showed that home prices remained relatively flat for the month, decreasing 0.27%.

Home Price Perception Index (HPPI)

Gap Between Homeowner Perception and Appraised Value Widened Significantly in July - Quicken Loans Zing Blog

Homeowners overvalued their homes for the sixth straight month. The gap is also getting wider. This month’s 2.33% differential is up almost a full point from the 1.40% level posted in June.

The difference of opinion has crossed 2% in all regions of the country. The chasm is most pronounced in the Midwest, where homeowners see the value of their properties as being 2.55% higher than appraisers do. They’re followed by the Northeast with a difference of 2.50%, the South at 2.30% and the West with a rating 2.04% higher than appraisers.

Turning to metropolitan areas, properties in San Jose, CA continue to be the most undervalued by their residents. Appraisers rate homes in San Jose 5.96% higher than homeowners. On the other end of the spectrum, property owners in Philadelphia are rating their properties 3.03% higher than appraised value. Opinions are closest to equilibrium in Minneapolis, where homeowner perceptions are just 0.02% higher than those of appraisers.

Quicken Loans Chief Economist Bob Walters said that recent events might be leading homeowners to be overly optimistic in their estimates.

“Many homeowners around the country are seeing the national headlines about home value increases and they are optimistic about their equity increasing,” said Walters. “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 homeowners and appraisers not quite seeing eye to eye.”

Home Value Index (HVI)

Gap Between Homeowner Perception and Appraised Value Widened Significantly in July - Quicken Loans Zing Blog

Home values declined 0.27% nationwide in July, a number that’s pretty much flat for the month. Despite this, values are up 3.89% since last July.

The West saw an increase of 0.07% for the month and a 6.30% year-over-year gain. The South was flat for the month and up 3.34% on the year. In the Northeast, values dropped 0.60% and are up 0.87% annually. The Midwest is up 1.20% this year after dropping 0.69% in July.

Walters said that when it comes to home value, looking at national trends can be misleading.

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

The Quicken Loans Home Value and Home Price Perception Indexes are released on the second Tuesday of each month on the Quicken Loans Press Room.

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