Who Values the House More?Posted on January 1, 2015 by
Investors and homeowners alike are almost intuitively inclined to have a higher opinion of their existing or potential properties than other parties. This would include potential buyers, lenders, brokers and even appraisers. However, this wasn’t always the case during the bubble years of the last decade. We know inflated real estate appraisals contributed to the excesses. The data within REIAComps has consistently shown investors how to determine both solid acquisition value and after repair value for residential real estate.
For those of you already connected to REIAComps, the control and feeling of confidence you have over your deals is priceless. Having valuation data at the ready adds power and knowledge to your tool belt. Use REIAComps to investigate the changing values of dwellings no matter what market area you are in.
When we look at the half-dozen years after the financial crisis, everything got turned upside down. We know Appraisers became in most cases overly conservative. Every one saw Appraisal values were consistently lower than homeowner value opinions from 2007 to 2013. We could even say this factor was a drag on the U.S. housing-market recovery.
Recently, that has changed in the past year. Watching data on REIAComps, the average estimated value now is higher than most investors estimates of value. This is especially true when compared to using free sites which aren’t really valuations sites in the first place.
If we look at the higher end real markets vs. the lower end markets, both show indications estimated values exceeded homeowner estimates. Possibly appraiser optimism is something of a factor. Think about it, it makes for a much smoother mortgage process if appraisers are valuing homes above both investor and homeowner.
Use this knowledge and know your real estate valuation estimates are in line with the market area. Watching the increase in estimated values and how they impact your investments helps keep profitable dollars in your pocket.