Homeowners and Appraisers Further Apart as Values Decline - Quicken Loans Zing Blog

It may be Valentine’s Day, but Cupid’s arrow isn’t showing homeowners any love on the home price front. Data released today by Quicken Loans shows that homeowners and appraisers grew further apart in January, in terms of their estimates of home value.

Part of the reason for the bigger difference of opinion is probably that overall values declined 0.34% in January. Despite this, home values are up 3.93% compared to the same time last year.

Home Price Perception Index (HPPI)

Homeowners and Appraisers Further Apart as Values Decline - Quicken Loans Zing Blog

Homeowners overestimated the value of their homes by 1.47% in January, heading in the wrong direction, as they were off by 1.33% in December.

In terms of regional data, estimates were closest in the West where homeowners overvalued their homes by just 1.19%. The Midwest had its eye furthest from the ball, overvaluing homes by 1.65%.

Denver continues to be the hottest housing market, with homeowners underestimating value by 2.98%. Riverside, Calif., homeowners were closest to actual value, overestimating home values by just 0.04%. Meanwhile, homeowners in Philadelphia aren’t feeling much brotherly love in the housing market right now: Residents overestimate home values by 2.94%.

Quicken Loans Chief Economist Bob Walters stressed the importance of homeowners of prospective buyers having an accurate idea of local home values.

“Having a good understanding of the conditions in their local housing market can be a valuable tool for consumers as they prepare for the home buying or mortgage process,” said Walters. “Accurate expectations at the onset of the mortgage process not only make it smoother but can prevent unexpected changes in the amount of funds to bring to the closing table if the appraised value comes in lower than initially estimated.”

Home Value Index (HVI)

Homeowners and Appraisers Further Apart as Values Decline - Quicken Loans Zing Blog

Home values were down a little bit in January, falling 0.34%. Still, when looked at year-to-year, they’re up 3.93%.

Turning for a moment to regional data on values, the South was the only region to show growth in January, up 0.68%. The Midwest was pretty much flat. Bigger price drops of 0.58% and 1.37% were seen in the West and Northeast, respectively.

Walters said supply constraints may be the key piece keeping prices up at this point.

“Tight inventory has been a key contributing factor to the year-over-year growth in home values,” said Walters. “This steady growth could very well lead to more availability, driving homeowners to consider cashing in on their growing equity by putting their home on the market. When this happens, it will open up new opportunities for eager buyers.”

Whether you’re looking to buy or refinance, home values are very healthy right now. If you feel it’s the right time to make a move with your mortgage, go ahead and lock in that rate.

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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This Post Has 2 Comments

  1. I am a Real estate appraiser and do a lot of work for Quicken Loan (btw). The problem in value difference, because appraiser use compostables from months of November, December. These mounts are typically slow in real estate industry. Seller getting motivated and sell properties below prices VS summer months.

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