The gap between homeowners’ and appraisers’ perceptions on the value of properties is continuing to close. While Southern California homeowners are slightly underestimating their home’s value, homeowners, in general, still tend to slightly overestimate the price of their home–but not by nearly as much as they did a year ago.
Home appraisals were, on average, 0.5 percent lower than what owners expected in December, according to the latest National Quicken Loans Home Price Perception Index. The gap is closing; a year ago, homeowners were overestimating their property values by a full 1 percent more than appraisers.
Home values are increasing, which helps value estimates align. Quicken Loans’ index showed the average appraisal value increased 0.65 percent from November to December 2017. This is 6.17 percent higher than a year ago.
“Appraisers and real estate professionals evaluate their local housing markets daily,” says Bill Banfield, Quicken Loans executive vice president of Capital Markets. “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. This is reflected in the [index]. The housing markets that are rising quickly, like those in the West, are having appraisal values increasing above owner estimates because owners don’t realize just how quickly those markets are advancing.”