2 Things You Need to Know to Properly Price Your Home
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.
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!
Key Terms for Homebuyers
Key Terms for Homebuyers Some Highlights Knowing key housing terms and how they relate to today’s market is important. For example, when mortgage rates and home prices rise, it impacts how much home you can afford. Terms like appraisal (what lenders rely on to...
Spring Home Buyers Guide for 2022 is Here!
[pdf-embedder url="https://utahrealtyplace.com/wp-content/uploads/2022/03/BuyingaHomeSpring2022.pdf.pdf"]
Things-To-Avoid-After-Applying-for-a-Mortgage
Things-To-Avoid-After-Applying-for-a-Mortgage It's essential to avoid mishaps after applying for a mortgage. Let's connect so you know what to avoid during this part of the homebuying process. [video width="1920" height="1080"...
The #1 Reason To Sell Your House Today
Why Acting Strategically as a Seller Is Your Best Play
Positive: Professionalism, Responsiveness Marty sat down with my and wife and me to explain his process...
4 Simple Graphs Showing Why This Is Not a Housing Bubble
4 Simple Graphs Showing Why This Is Not a Housing Bubble A recent survey revealed that many consumers believe there’s a housing bubble beginning to form. That feeling is understandable, as year-over-year home price appreciation is still in the double digits. However,...
What Every Seller Needs To Know About Renovating This Year
What Every Seller Needs To Know About Renovating This Year If you’re planning to sell this year, you’re probably thinking about what you’ll need to do to get your house ready to appeal to the most buyers. It’s crucial to work with a trusted real estate professional...
Pugs and Kisses
I know I look a lot younger in my photo! Wishing You The Best Valentines Ever!
Is This Your Year To Break Up with Renting?
Is This Your Year To Break Up with Renting? If you aren't in love with renting, you're not alone. Let's...
Want Top Dollar for Your House? Now’s the Time To List It.
Want Top Dollar for Your House? Now’s the Time To List It. When you’re selling any item, you usually want to sell it for the greatest profit possible. That happens when there’s a strong demand and a limited supply for that item. In the real estate market, that time is...