Finding the Right Price for your Home

Dated: 05/28/2019

Views: 72

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.

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

Boyd Smith

With over 30 years experience in Residential Real Estate and Brokerage Management, my goal has always been to foster the company with the most professional and successful associates in the business. ....

Latest Blog Posts

Interest Rates Over Time [INFOGRAPHIC]

Interest Rates Over Time [INFOGRAPHIC]Some Highlights:With interest rates hovering at near historic lows, now is a great time to look back at where they’ve been, and how much they’ve

Read More

The Overlooked Financial Advantages of Homeownership

The Overlooked Financial Advantages of HomeownershipThere are many clear financial benefits to owning a home: increasing equity, building net worth, growing appreciation, and more. If you’re a

Read More

The #1 Reason to List Your House Right Now

The #1 Reason to List Your House Right NowThe success of the U.S. residential real estate market, like any other market, is determined by supply and demand. This means we need to look at how many

Read More

Great News for Renters Who Want to Buy a Home

Great News for Renters Who Want to Buy a HomeRents in the United States have been skyrocketing since 2012. This has caused many renters to face a tremendous burden when juggling their housing

Read More