First
American Title issues a quarterly report, the Real Estate
Sentiment Index (RESI), which “measures
title agent sentiment on a variety of key market metrics and industry issues”.
Their 2015 4th Quarter Edition revealed some interesting information
regarding possible challenges with appraisal values as we head into 2016.
“The fourth quarter RESI found that title agents continue to
believe that property valuation issues will be the most likely cause of title
order cancellation over the coming year.”
This shouldn’t come as a surprise. In a housing market where
supply is very low and demand is very high, home values increase rapidly. One
major challenge in such a market is the bank appraisal. If prices are jumping,
it is difficult for appraisers to find adequate, comparable sales (similar
houses in the neighborhood that closed recently) to defend the price when
performing the appraisal for the bank. Another monthly report
by Quicken Loans
measures the disparity between what a homeowner believes their house is worth
as compared to an appraiser’s evaluation. Here is a chart showing that
difference for each month through 2015. 
Bottom Line
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 even more
difficult than the first. That is why we suggest that you use an experienced
real estate professional to help set your listing price.
Looking to Buy, Sell, or Invest? Contact:
David Demangos
858.232.8410
Locally Known, Globally Connected
Luxury Home Marketing Specialist
Global Property Specialist
David@AwesomeSanDiegoRealEstate.com
Our Team Goes to Extremes to Fulfill Your Real Estate Dreams!
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