Homeowners think their homes are worth more than they are

by Steve Randall12 Mar 2019

Despite the news of an easing of home price acceleration, many home sellers believe their properties are worth more than they are.

According to the National Quicken Loans Home Price Perception Index, the value homeowners put on their mortgage applications in February was an average 0.5% lower than the value determined by appraisers.

While the gap is small nationally and was not more than 2% in any of the 27 metros included, it is the fourth consecutive month that the gap has widened.

Among the metros where sellers underestimated the value of their homes, Boston saw the widest gap with the average appraisal 2.51% higher than what the homeowner expected – which could add more than $11,000 in equity based on local median home prices.

"Even though the home value perceptions are declining at a national level, the majority of metro areas are getting appraisals at, or above, what the homeowner expected," said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. "This is particularly exciting news at a time when we are seeing heighted interest in cash out refinances. More and more, owners are choosing to invest in their home by making improvements instead of moving. If appraisals are higher than expected an owner could find it more comfortable to do those home improvements they always had in the back of their mind."

Home values stalled in February
The National Quicken Loans Home Value Index, which measures values based only on appraisal values, moved just 0.05% higher in February.

Year-over-year the pace was 5.47%, higher than the annual reading in January.

"Home values are still making modest annual gains, despite being practically stagnant when measured monthly. What everyone has their eye on is what will happen as the spring selling season kicks off," said Banfield. "Home prices, and in turn home values, are mostly driven by the balance of how many homes are on the market and the volume of buyers vying for them. Most of the industry is expecting the demand will remain high, like in years past, but what remains to be seen is how many owners will choose to list their home – creating availability for both first time and move up buyers."

 

Metropolitan

Areas

 

HPPI

February 2019

 

Appraiser Value
vs. Homeowner

Perception of
Value*

HPPI

January 2019

 

Appraiser Value
vs. Homeowner
Perception of

Value*

HPPI

February 2018

 

Appraiser Value
vs. Homeowner
Perception of
Value*

Boston, MA

+2.51%

+2.76%

+2.00%

Charlotte, NC

+2.10%

+2.24%

+1.18%

Denver, CO

+1.98%

+2.17%

+2.22%

San Jose, CA

+1.63%

+1.91%

+2.71%

Minneapolis, MN

+1.50%

+1.70%

+1.20%

Seattle, WA

+1.48%

+1.64%

+2.01%

Dallas, TX

+1.09%

+1.13%

+0.58%

Las Vegas, NV

+1.02%

+1.39%

+2.72%

San Diego, CA

+0.93%

+0.86%

-0.07%

Atlanta, GA

+0.73%

+0.74%

+1.91%

Kansas City, MO

+0.67%

+0.94%

+1.30%

San Francisco, CA

+0.57%

+0.60%

+0.38%

Phoenix, AZ

+0.52%

+0.73%

+0.47%

Washington, D.C.

+0.46%

+0.46%

+0.84%

Sacramento, CA

+0.43%

+0.76%

+0.94%

Portland, OR

+0.26%

+0.26%

+1.01%

Los Angeles, CA

+0.06%

+0.10%

+0.81%

Riverside, CA

-0.02%

+0.02%

+0.75%

Houston, TX

-0.22%

-0.37%

-0.32%

New York, NY

-0.37%

-0.27%

+0.19%

Miami, FL

-0.40%

-0.46%

-0.58%

Detroit, MI

-0.46%

-0.35%

+0.83%

Tampa, FL

-0.48%

-0.23%

-0.85%

Baltimore, MD

-0.48%

-0.47%

-0.68%

Philadelphia, PA

-0.57%

-0.69%

+0.42%

Cleveland, OH

-0.70%

-0.59%

+0.43%

Chicago, IL

-0.79%

-0.62%

-0.55%

*A positive value represents appraiser opinions that are higher than homeowner perceptions.
 A negative value represents appraiser opinions that are lower than homeowner perceptions.


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