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Appraiser and Homeowner Opinion Gap Doubles in July

appraisalQuicken Loans reported on Tuesday that the gap between homeowner estimates and appraiser opinions of value in July was nearly double the gap between these values in May.

This will mark the sixth consecutive month that homeowners valued their homes higher than appraisers.

According to Quicken Loans, appraiser opinions of home values were 2.33 percent lower than homeowner estimates in July, according to the company’s national Home Price Perception Index (HPPI).

“Many homeowners around the country are seeing the national headlines about home value increases and they are optimistic about their equity increasing,” said Bob Walters, chief economist at Quicken Loans. “While some areas are seeing the same level of home appreciation, or even more, there are also some areas that have slower home value increases. This can lead to homeowners and appraisers not quite seeing eye-to-eye.”

The national HPPI found that homeowners are increasingly overvaluing their homes. The study showed appraisers’ opinions of home values was, on average, 2.33 percent lower than homeowners’ estimates in July. Last month’s gap was nearly double the difference between opinions in June when appraisers’ opinions were 1.40 percent less than homeowners’ estimates.

The HPPI also determined that appraiser values were lower than homeowner perceptions in Philadelphia, Pennsylvania (-3.03 percent); Kansas City, Missouri (-2.69 percent); Charlotte, North Carolina (-2.15 percent); Chicago, Illinois (-2.04 percent); and Cleveland, Ohio (-1.36 percent).

Quicken Loans’ Home Value Index (HVI), the only measure of home values based exclusively on actual home appraisals, reported national housing values were nearly flat, with a 0.27 percent drop in value. In addition, the index showed a 3.89 percent value growth nationally since July 2014.

“A slowing of home value increases adds to the misunderstanding of local home values,” Walters said. “Appraisers are viewing the housing industry every day; they know when home values growth may be slowing. Homeowners may think values are still skyrocketing, when they have instead returned to more healthy appreciation in their area.”

Click here to view Quicken Loans full report. 

About Author: Xhevrije West

Xhevrije West is a writer and editor based in Dallas, Texas. She has worked for a number of publications including The Syracuse New Times, Dallas Flow Magazine, and Bellwethr Magazine. She completed her Bachelors at Alcorn State University and went on to complete her Masters at Syracuse University.

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