Quicken: Owner, Appraiser Opinions of Home Values Closest to Alignment since 2015

Quicken Loans, Detroit, said appraised values of homes were only 0.25 percent lower than what homeowners estimated in June, the closest convergence point since February 2015.

The company’s monthly Home Price Perception Index showed “vast improvement” from a year ago, when appraisals were 1.70 percent lower than what owners expected. The report said while home value perceptions continued to improve, appraisal values posted a slight retreat in June. Quicken reported the average appraisal value fell 0.63 percent from May to June; however, the report showed growth when compared to the previous June, increasing by 4.57 percent year-over-year.

Bill Banfield, Quicken Executive Vice President of Capital Markets, said technology is playing an increasing role in modernizing the appraisal process. “The valuation has historically involved an appraiser coming to personally inspect the home and give their personal opinion of its value,” he said. “Now more technology is becoming available to modernize the appraisal process. However, even with a more data-based approach, there can be some disconnect between the appraised value and homeowners perception of value.”

The report said as the average gap between value opinions narrows on a national level, more metro areas are seeing appraisals higher than expected. Nearly three quarters of the metro areas measured are seeing the bulk of their appraisals come back higher than what was expected. On a regional level, the Northeast had the largest monthly fall, with a 3.25 percent drop from May to June. When viewed on an annual level, the West had the largest increase, with a 5.76 percent rise in home equity from since June 2017.

“The home value growth in June reflects a much healthier housing market than we have seen in years past,” Banfield said. “Some fluctuation month-to-month is normal for a well-functioning real estate market. The annual appraisal changes are also in a healthy range. This slow rise, not straying too far from the inflation rate, helps keep control of affordability.”