Appraiser, owner home-value opinions move closer to equilibrium

by Francis Monfort12 Oct 2017
Homeowner opinions of their homes’ values still differed from appraiser valuations in September despite an increase in appraised home values, according to Quicken Loans. However, the gap between homeowner opinion and appraised value continued to narrow.

The company’s Home Price Perception Index showed that appraiser valuations were 1.14% lower than owner expectation during the month, despite a 0.44% increase in home values from August to September based on the Home Value Index (HVI), which is based solely on appraisal data. The HVI showed home values jump 3.38% during the month on a year-over-year basis.

Despite the difference in home-price perceptions, Quicken Loans said September showed a positive trend. It was the fourth straight month where the difference in perceptions narrowed as they move closer to equilibrium.

Regionally, however, there remains a wide variety of home-value perceptions. On average, appraisals were 2.87% higher than expected in Dallas. Meanwhile, Philadelphia saw average appraisals 2.89% lower than homeowner expectations.

Home values rose for all regions on a year-over year basis, with the South seeing a 2.08% increase and the West posting a 5.77% gain. On a monthly basis, however, the South recorded a 1.33% decrease.

“Home values are highly impacted by the balance of buyer’s interest and the volume of available homes. Currently, this is highly tilted, with a lack of home inventory – leading to rising values,” said Bill Banfield, Quicken Loans executive vice president of capital markets. “One of the most impactful things that could be done to achieve stability is an increase in new home building. If move-up buyers move on to new construction, it will open up starter homes for first-time buyers.”

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Appraiser-owner home-value opinion gap tightens in August
Home values rise in July