Gap between appraisals and expectations widens again in March

Charming home with 3/4 BDs, 2-1/2 BAs, woodstove in FR, heated room on back of 2 car garage, whole house generator in a private setting. $525,000

- Contemporary home with 3 BDs, 2 FBs set on 2.76 secluded acres. Open floor plan, heated indoor pool, hot tub, solar panels and more. Call Jim Malloy 860-271-1546 for more info. $325,000

Contemporary Colonial with 5 BDs 5 FBs 2 half baths CAIR 2 Car garage and water views. 4 Latitude Circle, Stonington - Exceptional Colonial with first floor MBR suite, gourmet kitchen, open floor plan, distant waterviews, central air, 2 car garage and much more. Call Kim Malek 860-639-9112. $625,000 25 Hancox, Stonington - Direct waterfront w/ amazing, expansive views of Sandy Point & Watch Hill. Large deep water dock. Currently used as an income producing 4 family, could be converted to a single family. 4,300+ sq ft of living space.

Home values and appraisals in the United States continued to show growth in March, according to the retail mortgage lender Quicken Loans. However, homeowners were still more likely to overestimate their property's value than underestimate it.

The average appraisal during the month came in 1.77 percent lower than a homeowner's expectation. This marked the fourth consecutive month where the difference between homeowner expectations and appraised values grew wider.

For several years, Quicken Loans has been tracking the difference between how much a homeowner thinks their property is worth and the value determined by an appraiser. Appraisals are typically lower than expected, with the average appraised value coming in more than 8 percent below expectations in late 2008, but were greater than expected for the average homeowner from late 2013 through 2014.

The average homeowner perceptions were starting to move closer to the appraised value in late 2016, but the gap has recently been widening again. The typical appraisal came in 1.33 percent lower than expected in December, 1.47 percent lower in January, and 1.69 percent lower in February.

"The national average shows appraisals lower than homeowner expectations, but some cities are bucking that trend," said Bill Banfield, vice president of Quicken Loans Capital Markets. "With prices sprinting forward in many of the booming housing markets in the West, it can be difficult for homeowners to keep up with appraisers, who are on the ground, examining real estate price changes every day. This study is one more reminder for consumers to keep an eye on their local market before selling or refinancing. The state of their local market could affect their home's value – on either end of the spectrum."

In 15 of the 27 cities included in the monthly update, the average appraisal was higher than expected. The average appraisal was within 1 percent of expectations in 12 of these markets.

Denver continued to pleasantly defy expectations, with the average appraisal coming in 2.69 percent higher than anticipated. This was followed by Dallas (2.25 percent higher), Portland, Ore. (1.77 percent higher), and San Francisco (1.31 percent higher). The average appraisal was 3.2 percent lower than expected in Philadelphia, 3.18 percent lower in Baltimore, and 2.41 percent lower in Cleveland.

In the Northeast, the average appraisal was 1.96 percent lower than expected. It was 1.94 percent lower in the Midwest, 1.75 percent lower in the South, and 1.46 percent lower in the West.

Quicken Loans' Home Value Index for the nation stood at 100.46 for March, an increase of 0.63 percent from February and 3.3 percent from March 2016. A value of 100 indicates values equal to those in January 2005.

"As home selling gets started across the country, enthusiastic buyers are battling for available homes," said Banfield. "The increased attention to home sales has led to more competition for a relatively small inventory or homes, continuing to fuel the rising prices."

The Home Value Index was up in all regions, led by the South. This region's HVI of 103.1 was up 0.84 percent from February and 4.67 percent from March 2016. In the West, the HVI increased 0.71 percent from the previous month and 3.61 percent from the previous year to 120.79.

The HVI in the Northeast stood at 95.4, up 0.86 percent from the previous month and 2.11 percent from the previous year. The figure increased 1.78 percent from February and 3.85 percent from March 2016 to 83.43 in the Midwest.

Quicken Loans bases its reports on home values and perceived values on refinance mortgage applications as well as appraisal data for both purchase mortgages and refinances.