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, the Home 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.

2 Things You Need to Know to Properly Price Your Home | Simplifying The Market

While the appraisal gap widens, another trend is also becoming more common.

According to realtor.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!

Bottom Line

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!

Content previously posted on Keeping Current Matters

Ben Stern

REALTOR ®
RE/MAX Prime Properties
407-595-8374

Chat with me now

Sign up to our email/blog and receive a FREE package of great information; An exclusive BUYER and SELLER guide, PLUS two bonus Ebooks.. THE SLIGHT EDGE and REPROGRAMING YOUR MIND FOR SUCCESS.. two great leadership books for those looking to be successful in real estate and in life.


By submitting this form, you are consenting to receive marketing emails from: Stern Realty Team @ RE/MAX Prime Properties, 13848 Tilden Road, Winter Garden, FL, 34787, http://www.sternrealtyteam.com. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact