young couple standing outside of their new house

Homeowner expectations were 2.17% lower than appraiser estimates nationwide in March. The gap is 0.18% wider than this time in February.

In more of a positive note for sellers, home values were up 0.29% in March and 4.77% on the year.

Home Price Perception Index (HPPI)
Homeowners Overestimate Value of Homes - Quicken Loans Zing Blog

Homeowners were feeling really good about their home values in March as homeowners overestimated their property value by 2.17%, widening the chasm between themselves and appraisers.

That said, this trend is not the same across the country. In many areas of the West, appraiser estimates are outpacing homeowner expectations of value. The opposite is true for all cities in the Midwest.

Quicken Loans Chief Economist Bob Walters reiterated a familiar real estate axiom. It’s all about location, location, location.

“The varying HPPI values across the country illustrate the importance of examining the market at the local level,” said Walters. “If homeowners are eyeing that new home being built across town, they could be pleasantly surprised how much their home will sell for – or in some instances their equity may not take them as far as they think – depending on what area of the country they’re in.”

Homeowners in the West are closest to appraiser opinion, coming in 1.92% above the appraised value. The South and Midwest follow, coming in at 2.14% and 2.20% above appraisers, respectively. The Northeast comes in 2.36% higher than appraiser opinion.

Turning to data from some of the nation’s major cities, homeowners in San Jose, Calif., continued to have the most undervalued properties with their estimates coming in 3.93% below those of appraisers. Philadelphia homeowners continue to be out of touch with the market at the opposite end of the spectrum. They overvalue their homes by 3.62%. Las Vegas is apparently a really good place to make a bet on your home value, as homeowners there value their homes just 0.05% below the estimates of appraisers.

Home Value Index (HVI)

Homeowners Overestimate Value of Homes - Quicken Loans Zing Blog

Home values in the U.S. were up 0.29% for the month and 4.77% over the previous March. The trend of generally rising home values has been happening since 2012.

In the West, values are up 1.52% for the month and 7.43% for the year. In the South, values are also up 0.32% and 3.75% annually. In the Midwest, values are down 0.67% for the month but up 2.75% on the year. Similarly, the Northeast is down 0.76% but up 1.36% since this time last year.

Walters said that increases in home values give homeowners more options in terms of both purchasing and refinancing.

“It’s not always easy for homeowners to keep their finger on the pulse of their equity,” said Walters. “This data shows homes have continued to increase in value since the depths experienced after the last recession. Those increases mean far fewer Americans have negative equity in their homes. This increases their mobility and is a positive development for all segments of the housing market.”

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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