In today’s housing market, home prices are increasing at a slower pace (3.7%) than they have over the last eight years (6-7%). However, they are still are above historical norms. Low supply of listed homes and high demand from buyers has pushed prices to rise rapidly.
In the mind of the homeowner, annual home price appreciation over 6% has become the new normal. This becomes a challenge when a homeowner looks to refinance or sell their home, as the expectation of what the homeowner believes the home should be worth does not always line up with the bank’s appraisal.
Every month, theHome Price Perception Index (HPPI)measures the disparity between what a homeowner seeking to refinance their home believes their house is worth and what an appraiser’s evaluation of that same home is.
Over the last five months, the gap between the homeowner’s opinion and the bank’s appraisal has widened to -0.78%. This is important for homeowners to note, as even a 0.78% difference in appraisal can mean thousands of dollars that a buyer or seller would have to come up with at closing (depending on the price of the home).
The chart below illustrates the changes in home price estimates over the last 12 months.
While the appraisal gap widens, another trend is also becoming more common.
According torealtor.com,“the share of homes which had their prices cut increased by 2% compared to last year”. Thirty-seven out of the 50 largest US housing markets saw an increase in overall price reductions.
In today’s market, you need an expert agent who can help price your house right from the start. Homeowners who make the mistake of overpricing their homes will eventually have to drop the price. This leaves buyers wondering if the price drop was caused by something wrong with the house. In reality, nothing is wrong-the price was just too high!
If you are planning on selling your house in today’s market, let’s get together to set your listing price properly from the start!
Author:Josh Zehnder Phone: 937-219-4870 Dated: June 14th 2019 Views: 2,719 About Josh: My commitment is to the Greater Dayton & Cincinnati areas. I have over 15 years of experience in the...
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My commitment is to the Greater Dayton & Cincinnati areas. I have over 15 years of experience in the local real estate market, along with an extensive construction background. I pride myself in the fact that my clients always walk away happy, and that they refer their family and friends to me. I have a great team of lenders, inspectors, insurance agents, and title companies that along with myself will go out of their way to make sure you have the best experience possible. Give me a call and lets get the process started!!
No matter how many people I meet in this business, I continue to take pleasure in getting to know every one of my clients as I assist them in navigating them down their real estate path. With me, you wil l never experience the feeling that I do not care. You can reach me, I do return my calls, I will not pass you off to someone else, I care about you and your transaction. I make each real estate transaction memorable so that my clients will refer me to others - that is how I build a real estate business. I need your help and customer satisfaction is the best way forward.