Jan 25 2018 5018 2

Dated: 01/25/2018

Views: 22

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

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

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 | MyKCM

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.

Blog author image

Jeri Patrick

In today’s complex and difficult real estate market you need a professionals who will do whatever it takes to market and sell your home. Jeri Patrick has a team with an established history of succes....

Want to Advertise on this Site?

Latest Blog Posts

Feb 21 2018 5018 1

80% of Renters Believe Homeownership is a Part of Their American DreamAccording to the latest Aspiring Home Buyers Profile by the National Association of Realtors (NAR), 82% of

Read More

Feb 20 2018 5018 1

2 Ways to Get the Most Money from The Sale of Your HomeEvery homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive the

Read More

Feb 19 2018 5018 1

Top 5 Reasons to Hire a Real Estate Professional When Buying or Selling!Whether you are buying or selling a home it can be quite the adventure, which is why you need an

Read More

Feb 16 2018 5018 1

Should I Wait Until Next Year to Buy? Or Buy Now? [INFOGRAPHIC]Some Highlights: The Cost of Waiting to Buy is defined as the additional funds it would take to buy a home if prices &

Read More