Home values continue to climb and are projected to increase by about 5% over the next twelve months here in San Luis Obispo. That is good news for anyone who owns a home. However, it could present a challenge for a family trying to sell their house.
If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that closed recently) to defend the sales price when performing the appraisal for the bank.
The National Association of Realtors (NAR) recently released information revealing just how prominent the challenge is in today’s market.
And the challenge is deepening…
Every month, Quicken Loans measures the disparity between what a homeowner believes their house is worth as compared to an appraiser’s evaluation in their Home Price Perception Index (HPPI). Here is a chart showing that difference for each of the last 12 months.
As we can see the difference has increased each of the last two months.
Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be more difficult than the first. If you are planning on putting your San Luis Obispo home on the market this year, I am here to guide you through this process, and effectively deal with any other obstacles that may arise. That’s what I am here for!