Quicken Loans’ latest Home Price Perceptions Index report indicates that homeowners’ expectations and appraisers’ home price valuations are beginning to gel.
In May 2019, for the first time in six months, the average home appraisal on a single-family home came in approximately 0.79% lower than the average homeowner estimate of that home’s price. In fact, none of the cities evaluated by Quicken Loans for this report came in with appraised home valuations more than 2% lower that what homeowners expected those home prices to be.
Such valuations are much more in line with what homeowners “want” their home valuations to be. Bill Banfield, the executive vice president of capital markets for Quicken Loans, said, “An appraisal can cause a variety of emotions from curiosity of the value to frustration if (the appraised home valuation) comes in too low and even surprise if the appraised value shows more equity than the homeowner realized.”
Turns out that homes in Philadelphia were the largest group of homes that generated average appraisals 1,74% lower than owners’ expectations.
In Charlotte NC, homeowners were happiest with appraiser valuations in May. Single-family homes in Charlotte generated average appraisals coming in +1.99% higher than owners’ expectations.
“Luckily” said Banfield, “there were not a lot of frustrated homeowners in May since the Home Price Perceptions Index values across the country are in a relatively tight band, showing that appraisals are not likely to cause much of a disruption to the mortgage process.”
Home values across the country, according to Quicken’s HPPI, increased +3.54% y/y AND all regions across the country saw annual appraisal values increase similarly. Only the Midwest region of the country saw a month/month gain of less than that 3.54% gain. Instead, the Midwest saw a home value growth of just 0.47% gain.
Taking that discrepancy in home value growth to heart, Banfield said, “Winter’s long hibernation is definitely over for Midwestern homebuyers. They are hitting the streets and competing for persistently low inventories and (such demand) is leading to appraisal value spikes. This annual increase is a very positive sign (for Midwestern home markets) because it’s showing housing consumers that growth is more than just seasonality.”