A family standing outdoors admiring their new home

Homeowners and appraisers took a step toward agreement in September, as the gap between homeowner and appraiser home value opinions closed a little bit. Homeowners overestimated property value by just 1.26%, compared to 1.56% in August.

The rate of value appreciation did slow down some, as appraised values fell 0.28% in September. Property values are still up 7.78% on the year.

Home Price Perception Index (HPPI)

Gap Between Homeowner Opinions and Appraisal Values Narrows in September - Quicken Loans Zing Blog

Despite the fact that homeowners think their homes are worth 1.26% more than they actually are on a national level, this trend doesn’t necessarily hold true nationwide.

In many Western housing markets where there’s increasing demand for housing, like Denver, San Francisco and San Jose, property values are actually rising faster than homeowners think, and they tend to underestimate value. Because of this, homeowners in other areas, like Philadelphia, Baltimore and Chicago, are a bit surprised when appraisals come back lower than they thought they would.

Quicken Loans Chief Economist Bob Walters said homeowners should pay closer attention to their local markets in order to get a realistic idea of their property value.

“When reading about the health of the economy, many consumers don’t take into account how varied housing markets can be,” said Walters. “If a homeowner in Philadelphia hears about the housing boom out west, they could be surprised when their home doesn’t sell at the price they thought it would. I encourage homeowners to work with real estate agents, lenders and other experts to determine their home’s value.”

Homeowners in the West were closest to equilibrium, coming in at 0.73% higher than appraiser opinion. The Northeast, which is the nation’s slowest growing housing market, saw homeowners overestimating the value of their homes by 1.50%.

Even the regional data can’t tell the whole story, though, as 13 of the 27 metropolitan areas surveyed had property values higher than their homeowners anticipated.

Home Value Index (HVI)

Gap Between Homeowner Opinions and Appraisal Values Narrows in September - Quicken Loans Zing Blog

Differences in location affected not only the perception of value but also the values themselves. Homeowners may not have seen value increases nationwide, but that doesn’t give a full picture.

Although home values fell 0.28% nationwide, homeowners in the West and South saw their property values increase by 0.31%. In contrast, markets in the Midwest and Northeast are cooling as temperatures fall, down 2.23% and 1.42%, respectively.

Walters said the dip in values doesn’t point to a larger changing of fortunes in the housing market.

“This small decrease in home values is not a signal of a turning tide, it just shows the volatility that can come with changing seasons,” he said. “As the summer came to a close, the intense competition for available homes began to abate and home values dipped as a result. It’s important to focus on the annual picture. The strong yearly growth negates monthly changes and shows we are moving in the right direction.”

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

Has this data shown that now would be a good time to take cash out of your home? Or maybe you’re looking to buy before the winter chill really kicks in. Check out Rocket MortgageSM by Quicken Loans or call (888) 728-4702 to get started today.

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