Quicken Reports Widening Gap Between Owner, Appraiser Home Value Opinions

MBA NewsLink Staff

February 14, 2019

For the third consecutive month, Quicken Loans, Detroit reported an increase in the gap between appraised values of homes and homeowners' perception of their home's value, with Americans believing their home is appreciating faster than what appraisers say.

The company's Home Price Perception Index showed appraised values 0.47% lower than homeowners estimated in December, marking the third month in which the gap between these data points widened from the previous month.

Metro-level HPPI measurements show how perception is changing across the country. Quicken reported several western cities have seen their HPPI values drop as their home value growth slowed. San Francisco, for example, had average appraisals 2.11 percent higher than expected in January 2018. One year later, appraisals in the Bay Area are less than 1 percent higher than what homeowners estimate. All told, two thirds of the metro areas measured reported average appraisal values higher than what homeowners expected.

Bill Banfield, Quicken Loans Executive Vice President of Capital Markets, said while a small gap still persists between appraiser/homeowner opinions, this emerging trend could be a sign that homeowners aren't aware of recent home value changes.

"It looks like the HPPI is seeing the start of a downward trend, in lock-step with pockets of moderating home values," said. "However, with the national measure still reporting appraisals less than half of a percent lower than expected and with home values in the lowest performing metro area less than 2 percent lower than what homeowners estimated, the housing markets is still in a healthy place."

Banfield noted even though homeowners "may not have their finger on the pulse" of home value changes, appraisers have recorded fluctuations in select areas. The more notable changes to home values were reflected in the regional areas. Quicken reported a small monthly dip in appraisal values for homes in the West and Midwest, declining 0.38 and 0.08 percent respectively, and much more subdued annual appreciation in the West and South.

"These regional adjustments didn't cause huge ripples across the country, keeping the healthy appreciation that has been displayed as of late," Banfield said. "As homes in each market adjust for the rate of price appreciation, buyers and sellers may find that there is more to negotiate--and some potential complications--if the purchase price isn't supported by the appraised value."

Share this article