Gap Between Homeowners & Appraisers Narrows to Lowest Mark in 2 Years

Gap Between Homeowners & Appraisers Narrows to Lowest Mark in 2 Years | Simplifying The Market

In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. Many experts are projecting that home values could appreciate by another 4% or more over the next twelve months. One major challenge in such a market is the bank appraisal.

When prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that recently closed) to defend the selling price when performing the appraisal for the bank.

Every month in their Home Price Perception Index (HPPI), Quicken Loans measures the disparity between what a homeowner who is seeking to refinance their home believes their house is worth and what an appraiser’s evaluation of that same home is.

In the latest release, the disparity was the narrowest it has been in over two years, as the gap between appraisers and homeowners was only -0.5%. This is important for homeowners to note as even a .5% difference in appraisal can mean thousands of dollars that a buyer or seller would have to come up with at closing (depending on the price of the home)

The chart below illustrates the changes in home price estimates over the last two years.

Gap Between Homeowners & Appraisers Narrows to Lowest Mark in 2 Years | Simplifying The Market

Bill Banfield, Executive VP of Capital Markets at Quicken Loans urges homeowners to find out how their local markets have been impacted by supply and demand:

“Appraisers and real estate professionals evaluate their local housing markets daily. Homeowners, on the other hand, may only think about their housing market when they see ‘for sale’ signs hit front yards in the spring or when they think about accessing their equity.”

“With several years of growth, owners may have more equity than they realize. Many consumers use the tax season at the beginning of the year to reevaluate their entire financial life. It also provides a good opportunity for them to consider how best to take advantage of their equity while mortgage interest rates and borrowing costs are still near record lows.”

Bottom Line 

Every house on the market must be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, let’s get together to discuss this and any other obstacles that may arise.

By | 2018-01-24T05:00:37+00:00 January 24th, 2018|For Sellers, Move-Up Buyers, Pricing|Comments Off on Gap Between Homeowners & Appraisers Narrows to Lowest Mark in 2 Years

About the Author:

I am proud to have 25 years of experience as a Small Business Owner, Corporate Executive and Real Estate Investor. I am a native Idahoan and started my real estate career in 1991 working in title insurance, market development and lending programs in the Treasure Valley. I founded my own small business and later joined private industry with a focus on commercial facility management and construction. My career grew into leadership roles with responsibility for contract and real estate management, client negotiation, relocation, investment plan administration, project management, risk management and ethics. Most recently, I have joined the long-standing family real estate business, partnering with my mom (Shirley Hicks) as a second generation Real Estate Entrepreneur to do what I love. I’m passionate about assisting first time home buyers in their journey to achieve home ownership, partnering with seasoned home owners to facilitate buying and selling residential property and working with investors to augment their portfolios with real estate. Turning a house into a home and a place into a community is a benefit like none other. I Look forward to our paths crossing for all of your future real estate needs.