0
0
0

Chicagoans are overvaluing their homes

by James F. McClister

chicago-housing-stock-zillow-valuable-gains-2016-2015-affordability

There is a disconnect between homeowners and appraisers in Chicago, according to Quick Loans’ latest National Home Price Perception Index (HPPI).

The good news is the disconnect is slight. In February, homeowner opinion in Chicago placed the average home price at $192,000, less than 2 percent above what local appraisers said.

City Homeowner Opinion Appraiser Opinion
Atlanta $192,000 $190,598
Boston $435,000 $439,611
Charlotte, N.C. $216,000 $218,117
Chicago $244,000 $239,437
Cleveland $139,000 $136,137
Dallas $231,000 $234,620
Denver $387,000 $398,533
Detroit $164,000 $161,343
Las Vegas $236,000 $234,844
Los Angeles $537,000 $543,390
Miami $315,000 $315,599
Minneapolis $240,000 $242,424
New York $383,000 $377,638
Phoenix $235,000 $233,167
Portland $359,000 $366,719
San Diego $589,000 $592,122
San Francisco $835,000 $848,026
Seattle $422,000 $427,655
Tampa $205,000 $202,397
Washington, D.C. $394,000 $392,739

Understanding the difference between what someone thinks their home is worth and what it actually is worth is so important because, as Quicken Loans Chief Economist Bob Walters pointed out in a statement accompany the HPPI release, it helps create a much smoother home purchase or selling process.

“Having a good understanding of the conditions in their local housing market can be a valuable tool for consumers as they prepare for the home buying or mortgage process,” said Walters. “Accurate expectations at the onset of the mortgage process, not only makes it smoother, but can prevent unexpected changes in the amount of funds to bring to the closing table if the appraised value comes in lower than initially estimated.”

As if that wasn’t incentive enough, in a recent speech Gary Keller, founder of Keller Williams Realty, emphasized the importance accurate pricing, presenting results from a study his brokerage conducted (organized in the table below) that showed “precipitous drops” with each repricing of a home.

# Price Reductions Days on Market Sold Price/Original Price # of Transctions
0 40 99% 319,691
1 86 93% 85,031
2 118 91% 41,297
3 14 88% 19,249
4 170 87% 8,830
5 185 86% 4,386

Read More Related to This Post

Join the conversation

New Subscribe

  • This field is for validation purposes and should be left unchanged.