2 Things You Need to Know to Properly Price Your Home...

Dated: November 3 2019

Views: 18



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 | MyKCM

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!

Blog author image

Guillaume Derouet

Born in Paris France, I moved to the United States of America in 2009 where I immediately embarked on my Real Estate career in Manhattan New York. Wanting to help people from all nationalities here an....

Latest Blog Posts

Impact of the Coronavirus on the U.S. Housing Market....!

The Coronavirus (COVID-19) has caused massive global uncertainty, including a U.S. stock market correction no one could have seen coming. While much of the news has been about the effect

Read More

Detroit Real Estate Market 2020

The 2020 housing market in detroit that May Surprise YouThis will be an interesting year for residential real estate. With a presidential election taking place this fall and talk of a possible

Read More

The Cost Across Time ...!

Some Highlights:With interest rates around 3.66%, now is a great time to look back at where they’ve been over the past few decades. Comparatively, they’re pretty low!According to 

Read More

Buyers Are Looking Now. Are You Ready to List Your Home...?

Inventory on the market today is low, especially among existing homes in the entry and middle-level tiers of the market. It is hovering well below the 6-month supply typically found

Read More