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With home values dipping just slightly in December, the gap between appraisals and homeowner estimates of home value has widened. Owner estimates came in 1.33% higher than those of appraiser estimates. This is compared to a difference of just 1% in November.

Home values fell off 1.19% but were up 3.85% compared to the same time last year.

Home Price Perception Index (HPPI)

Home Values Cool, Appraisal Gap Widens - Quicken Loans Zing Blog

The 1.33% overestimate on the part of homeowners reverses a trend that’s been occurring since June toward more harmony between appraisers and homeowners. Now, this most recent movement gets rid of all the gains made since June in terms of a realistic understanding of home value.

Still, real estate markets are local rather than national in nature and estimates are all over the board in the cities surveyed. In Philadelphia, homeowners think their homes are worth 2.94% more than appraisers have valued them. Meanwhile, Denver continues to be an extremely hot market. Appraisals there are coming in an average of 3.04% higher than homeowners thought they would. Meanwhile, homeowners in Miami hit their appraised value nearly on the button, undervaluing their homes by just 0.01%.

Quicken Loans Chief Economist Bob Walters said being keyed in to your local real estate market can really help when looking to buy or refinance.

“It’s our hope that homeowners use the HPPI’s unique data as an insight into their local housing market,” said Walters. “When consumers have a better grasp of their local market conditions, it can help influence their expectations and, ultimately, lead to a smoother mortgage or home sales process.”

Finally, turning to the regional data, homeowners in the Midwest were off, overestimating value by 1.52%. Meanwhile, the West was closest, overvaluing by 1.06%.

Home Value Index (HVI)

Home Values Cool, Appraisal Gap Widens - Quicken Loans Zing Blog

Looking at the values themselves, they were down 1.19% in December. Despite this, they were up 3.85% annually. This represents a sizable slowdown in annual growth from where it sat in November at 5.28%.

There were value decreases in all four regions across the country. The smallest declines occurred in the warm weather of the South, sliding just 0.11%. Homeowners in the West were on the opposite end of the spectrum, losing 2.08% off their home values.

Walters said some of this decrease in value may have more to do with Old Man Winter than anything else.

“Home value growth has been mostly driven by enthusiastic buyers vying for a smaller-than-usual inventory of properties,” he said. “Appraised values have dipped along with the seasonal decline in sales around the winter months. It’s yet to be seen if value growth will build as sales rise in the spring, or as construction increases.”

Based on these value trends, do you think you’re ready to buy or refinance? Check out your options through Rocket Mortgage or give one of our Home Loan Experts a call at (888) 728-4702.

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

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