Spring is upon us, which means that homeowners across the country are gearing up to sell their homes, but based on a new survey of mortgage lender Quicken Loans, they can reevaluate their home.
According to Quicken, the estimated value of homes nationwide was 1.95% lower than homeowners’ estimates in April based on a home price index.
And while the disconnect narrowed between the estimated value and the estimated value from 2.17% in March, there is still a gap that could lead to frustration for homeowners.
Emotion can get in the way
Selling a home can be an emotional process. In the end, for many people, a home is the place where they raise their families or create what they are proud of.
Putting a price tag in a place that is rich in memories can often lead homeowners to think that their home is worth more than it is.
At the same time, appraisers are not as generous as they were during the housing bubble, when household values were growing rapidly. As soon as the housing market collapsed and the era of record foreclosures swept, appraisers were more realistic in valuing homes, adding to the blackout today. (Read more here: Top 4 Things That Determine Home Value.)
“Appraisers work daily in the local housing market, and they always know how quickly selling prices rise or fall,” says Bob Walters, chief economist at Quicken Loans.
“Homeowners, on the other hand, may not think about the value of their home until they decide to refinance or sell. This can cause owners to overestimate the value of their home in areas of slower growth or to lag behind appraisers in fast-growing housing markets, «adds Walters.
But this is not all bad news for homeowners who want to sell this spring. Quicken found that while evaluators’ ratings fell 0.66% from March to April, the annual rating is estimated at 3.79%. Overall, Quicken found homeowners in the Midwest and eastern cities who were constantly re-evaluating the value of their homes. Meanwhile, homeowners in western cities underestimate how much their homes cost, although the West has shown 4.8% higher appraisal prices, the largest increase for the year.