Home values are also on the rise, up 1.08% in November. They’ve increased 4.84% since this time last year.
Home Price Perception Index (HPPI)
The opinions of homeowners and appraisers continue to move closer together, despite the fact that homeowners overvalued their homes for the 10th consecutive month.
Although homeowners are overvaluing their homes overall, the number varies quite a bit from city to city.
“The variation in HPPI values across the country is a reminder of how localized real estate truly is,” said Bob Walters, Quicken Loans Chief Economist. “While home values continue to make leaps forward on the west coast, it takes time for the homeowner to recognize those gains. In the same vein, home value increases are moderating in much of the country, causing homeowners to be overly optimistic about their property’s value.”
Turning to regional data, homeowners are overvaluing their homes by 1.52% in the West and 1.91% in the South. The Midwest and Northeast have the biggest gaps with a 2.06% and 2.14% difference, respectively.
The regional data doesn’t tell the whole story. In 13 markets, appraisers are valuing homes for more than homeowners think they’re worth. In San Jose, CA, appraisers are valuing homes 5.15% higher than homeowners. Philadelphia is on the opposite end of the spectrum, with homeowners thinking their homes are worth 3.33% more than they are.
Home Value Index (HVI)
Home values across the country are on the rise, up 1.08% since October and 4.84% since last year.
This may or may not actually be a good thing because much of the growth is being driven by a lack of available housing in many markets. Pent-up demand drives prices up, but it may also be too steep for many home buyers.
“Home values continue to be driven higher as the economy improves and the desire for homeownership increases,” Walters explained. “Gains aren’t equal. In some areas, demand is robust, leading to considerable home value increases. Other markets are more balanced, resulting in more steady, measured home value growth.”
The South led the way in pricing gains, up 1.65% in the month of November. It was followed by the Northeast, which gained 1.24%. The West and Midwest brought up the rear with gains of 0.57% and 0.33%.
The Quicken Loans Home Price Perception and Home Value Indexes are released on the second Tuesday of each month on the Press Room.
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