Appraiser Home Value Opinions Fall Below Homeowner Estimates for First Time in 18 Months

  • March 10, 2015

– Home values continued to climb in February –

• Appraiser opinions of values remained higher than homeowner estimates in 18 of the 27 metro areas measured.
• In much of the country, home values remained idle. Values rose enough in the Western Region to push the total national average higher than in January.

DETROIT, March 10, 2015 – Detroit-based Quicken Loans, the nation’s second largest retail mortgage lender, today reported appraisers valued homes 0.13 percent lower than homeowners estimated in February, according to the company’s national Home Price Perception Index (HPPI). This is the first time appraiser opinions fell below homeowner estimates since August 2013.

The Quicken Loans Home Value Index (HVI), also released today, showed home values continued at a healthy pace. Nationally, values increased 1 percent from January to February, and grew 8.45 percent from the year prior.

Home Price Perception Index (HPPI)

Appraiser opinions were lower than homeowner estimates by 0.13 percent in February, compared to January when appraiser opinions were 0.18 percent higher than homeowners estimates in January. Despite the drop in the national HPPI, appraiser opinions remain higher than homeowner estimates in 18 of the 27 metro areas analyzed by the HPPI. Two cities of note are Baltimore and Atlanta, both of which moved from a positive to negative HPPI values – meaning appraisers now have a lower opinion of value than homeowners in these cities, dragging down the national average.

“While it’s significant that appraiser opinions are now lower than homeowners’ nationally, this minimal difference is unlikely to derail a refinance or cause headaches for the homeowner,” said Bob Walters, Quicken Loans Chief Economist. “The dip in the HPPI is likely caused by a delay of homeowner perceptions. As the economy recovered, homeowners hadn’t realized property values had improved. With the headlines of growing home prices, homeowners are catching up, but are now a bit overzealous in their estimates.”

Home Value Index (HVI)

February’s measure of home values followed the trend set in January, showing steady, healthy growth. Nationwide, home values increased 1 percent from January to February and increased 8.45 percent over the previous February. The West Region doubled the growth of the national average with a 2.46 percent home value increase since January. Home values in the South, Northeast and Midwest Regions were nearly flat with an increase of 0.35 percent and drops of 0.16 and 0.40 percent, respectively.

“The Western Region continues to glow red hot, while home values in the rest of the country remain frozen,” continued Walters. “The spring homebuying season may be a big market mover, depending on the inventory that is available. Bidding wars from a tight market could cause prices to jump, or we could see more gradual growth in a more balanced market.”

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About the HPPI & HVI

The Quicken Loans HPPI represents the difference between appraisers’ and homeowners’ opinions of home values. The index compares the estimate that the homeowner supplies on the mortgage application to the appraisal that is performed later in the mortgage process. This is an unprecedented report that gives a never-before-seen analysis of how homeowners are viewing the housing market. The Quicken Loans HVI is a view of home value trends based solely on appraisal data from home purchases and mortgage refinances. This produces a wide data set and is focused on appraisals, one of the most important pieces of information to the mortgage process.

Both of these reports are created with Quicken Loans’ propriety mortgage data from the 50-state lenders’ mortgage activity across all 3,000+ counties. The indexes are examined nationally, in four geographic regions and the HPPI is reported for 27 major metropolitan areas. All indexes, along with downloadable tables and graphs can be found at QuickenLoans.com/Indexes.

About Quicken Loans

Detroit-based Quicken Loans Inc. is the nation’s second largest retail home mortgage lender. The company closed $140 billion of mortgage volume across all 50 states in 2013-2014. Quicken Loans generates loan production from web centers located in Detroit, Cleveland and Scottsdale, Arizona. The company also operates a centralized loan processing facility in Detroit, as well as its San Diego-based One Reverse Mortgage unit. Quicken Loans ranked “Highest in Customer Satisfaction for Primary Mortgage Origination” in the United States by J.D. Power for the past five consecutive years, 2010 – 2014, and highest in customer satisfaction among all mortgage servicers in 2014.

Quicken Loans was named among the top-30 companies on FORTUNE magazine’s annual “100 Best Companies to Work For” list for the last 12 consecutive years, ranking No. 12 in 2015. It has been recognized as one of Computerworld magazine’s ’100 Best Places to Work in IT’ the past ten years, ranking No. 1 in 2014, 2013, 2007, 2006 and 2005. The company moved its headquarters to downtown Detroit in 2010, and now more than 10,000 of its nearly 12,000 team members work in the city’s urban core. For more information about Quicken Loans, please visit QuickenLoans.com, on Twitter at @QLnews, and on Facebook at Facebook.com/QuickenLoans.

Industry Reaction

“Perception of value is top of mind in just about every industry; however, when it comes to your home, it becomes very personal. For most, home ownership is the single largest investment they will ever make and having accurate data is a key economic driver of consumer confidence. Today, consumers and real estate agents find themselves in the midst of an improving home value market, but how much is it really improving?

We have seen firsthand that owners are more closely understanding how appraisers, and even buyers, are viewing their home in this post-recession landscape. As Quicken Loans’ HPPI shows, more owners are beginning to see eye-to-eye with appraisers, a far cry from the depths of the recession. This month’s HPPI shows that owners are estimating their home value slightly higher than appraisers, showing that owners are more confident in their community’s housing market and more willing to sell when the time is right for them.”

Craig Witt — President, North West U.S. Division, Exit Realty

Additional graphics are available below.

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