Gap between what homeowners and appraisers think widens yet again

Quicken Loans: For the seventh month in a row, homeowners think too highly

Appraiser opinions of home values were 2.65% lower than homeowner estimates in August, according to the company’s national Home Price Perception Index, according to Quicken Loans.

Homeowner estimates of their home’s value exceeded appraiser opinions by a wider margin than in July, making August the seventh consecutive month of an increasingly wider gap between opinions.

“While the month-to-month number is interesting to examine, it is not the single most important factor of the HPPI report. Instead, the focus should be on the trend, the direction it’s heading and how fast,” said Quicken Loans Chief Economist Bob Walters. “The perception trend of most of this year suggests homeowners may be assuming that home values have been in a steady, linear path upward. In reality, home values have remained mostly flat this year, and this false assumption may be leaving homeowners disappointed when their appraisals come in.”    

Quicken Loans’ Home Value Index, a measure of home value changes based on actual appraisals, reported national housing values were nearly flat in August from the month prior, with the slight drop of 0.05%.

Click to enlarge

(Source: QuickenLoans)

This is less than the 0.27% decrease in July. Home values continued to rise annually, showing a 3.24% increase in value nationally compared to August 2014.

The average difference between homeowner estimates and appraised values continues to increase, according to the national HPPI. In August, the HPPI showed homeowner estimates were 2.65% higher than appraiser opinions. Homeowner opinions were 2.33% higher than appraiser opinions in July.

Click to enlarge

(Source: QuickenLoans)

Home values were practically flat in August, falling a meager 0.05%, according to the national HVI. Values are continuing to climb when viewed at an annual level. Nationally, home values increased 3.34% from August 2014.

The Northeast region stands out in the latest HVI findings. It is the only region with a drop in home values in August. Moderating home values are a welcome sign to buyers, and could be especially enticing to those looking to purchase their first home.

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