~ As prices rise and inventory drops, make sure you work your Realtor in pricing your home correctly ~
Quicken Loans released its May National Home Price Perception Index (HPPI) on Tuesday, which showed that, on a national average, homeowners estimated their house’s worth at a higher value than it was appraised. May marks the sixth consecutive month that the gap between estimation and appraisal has widened.
The HPPI represents the difference between appraisers’ and homeowners’ opinions of home values, and compares the estimate that the homeowner supplies on a refinance mortgage application to the appraisal that is performed later in the mortgage process.
Appraised values were 1.93 percent lower than homeowners’ expectations, although home values continue to rise an average of 0.63 percent. Year-over-year, home values increased 4.92 percent according to Quicken Loans’ National Home Value Index (HVI).
Appraisals were also down regionally: the west reported a difference of 1.63 percent compared to homeowner estimation; the south a difference of 1.90 percent; the midwest a difference of 1.97 percent. The northeast had the largest disparity at 2.12 percent.
There were cities, however, where houses were appraised higher than what homeowners expected. Denver, Colorado had a difference of 2.58 percent, the highest in the country. Dallas, Texas came in at a close second, at 2.48 percent; and Seattle, Washington was number three at 1.38 percent.
Conversely, the cities of Philadelphia, Baltimore, and Chicago had the largest disparity between what homeowners expected and what they were appraised at. Homes in Philadelphia were appraised 3.32 percent lower than what owners expected. In Baltimore, they were 3.10 percent lower, and in Chicago the difference was 2.62 percent.
The gap was smallest in the cities of Kansas City, Missouri and Phoenix, Arizona, which were appraised 0.12 percent and 0.13 percent lower than homeowners’ expectations.
The Quicken Loans HPPI and HVI are released on the second Tuesday of every month.