Do You Know What Your Home is Worth?
The Gap Between Homeowner’s & Appraiser’s Opinions Widen
In today’s housing market where supply is very low and demand is very high, home values are increasing rapidly. One major challenge in such a market is the lender’s appraisal.
When prices are rising quickly, it is difficult for appraisers to find adequate, comparable sales (similar recent, sold houses in the neighborhood) to substantiate the purchase price when performing an appraisal for the bank.
Every month, Quicken Loans measures the disparity between what a homeowner believes their house is worth compared to an appraiser’s evaluation in their Home Price Perception Index (HPPI). This chart shows that difference for each of the last 12 months –
The gap between the homeowner v. the appraiser’s opinion had been closing until this past month, when the gap widened again to -1.99%.
Real Estate Bottom Line
Every house on the market has to 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 more difficult than the first. If you are planning on entering the housing market this year, let’s meet up so I can guide you through this, and any other, obstacle that may arise.