Quicken Loans: Homeowners and Appraisers Sync Up

Estimates about home values among homeowners and appraisers were considerably closer to lining up during the final month of 2017, according to new data released by Quicken Loans. According to the National Quicken Loans Home Price Perception Index (HPPI), home appraisals were only 0.5 percent lower than what homeowners expected in December 2017, up from 0.67 percent lower in November 2017 and a full 1 percent discrepancy in December 2016.

This gap between homeowner and appraiser perception was narrower in December 2017 than it had been since March 2015. That trend toward homeowners and appraisers being more on the same page has been continuing for seven months in a row. In only a quarter of the metros measured by the HPPI were appraiser opinions lower than homeowner opinions.

"Appraisers and real estate professionals evaluate their local housing markets daily,” said 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 HPPI. 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."

Quicken Loans’ Home Value Index also reports that the average appraisal value for homes increased 0.65 percent between November and December, and an impressive 6.17 percent compared to December 2016. The West leads the nation in home appraisal values according to Quicken Loans’ data, growing 7.42 percent year-over-year compared to December 2016. Trailing behind the West were the Midwest (6.46 percent YOY increase), South (6.37 percent YOY increase), and Northeast (3.50 percent YOY increase). The Northeast is also the only region that saw a month-over-month decrease in appraised home values in December, dropping 0.21 percent month-over-month.

"Homeowners received the gift of added equity this holiday season," said Banfield. "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."

The top five metros where appraiser value topped homeowner perception of value in December 2017 included:

• Dallas, Texas (+3.17 percent)
• San Jose, California (+2.55 percent)
• Denver, Colorado (+2.22 percent)
• San Francisco, California (+2.22 percent)
• Seattle, Washington (+2.20 percent)

The five metros Quicken Loans found to have the biggest disparity between homeowner and appraiser perception for December included:

• Cleveland, Ohio (-2.09 percent)
• Philadelphia, Pennsylvania (-1.97 percent)
• Baltimore, Maryland (-1.78 percent)
• Chicago, Illinois (-1.38 percent)
• Houston, Texas (-0.43 percent)

You can read more of Quicken Loans data by clicking here.