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In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. One major challenge in such a market is the bank appraisal.

Appraisal-Gap

If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that closed recently) to defend the price when performing the appraisal for the bank.

Every month, Quicken Loans measures the disparity between what a homeowner believes their house is worth as compared to an appraiser’s evaluation in their Home Price Perception Index (HPPI). Here is a chart showing that difference for each of the last 12 months.

Appraisals-opinions

The gap between the homeowner vs. appraiser’s opinion had been heading in the right direction (closer to even), until this past month, when the gap widened again to -1.99%.

Bottom Line 

Every house on the market has to 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, meet with us here at the Kim Odegard Team, Keller Williams Realty  who can guide you through this, and any other, obstacle that may arise. 219-671-1111

Sellers who followed their real estate agent’s advice on pricing sold their house 38 days faster than those who didn’t. Better yet, those sellers often sold for more money – almost $4,000 more for the average house. We’d be happy to give you an estimate of what your home is worth in today’s market.  219-671-1111.

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