Report suggests Las Vegas homeowners, appraisers close on home worth

What's your home worth on the market? A Quicken Loans index suggests valley homeowners and appraisers are close to agreeing.

The Detroit-based mortgage lender ranked Las Vegas 11th of 27 U.S. metropolitan markets on its Home Price Perception Index for December. In the valley, appraisers' home-value assessments exceeded homeowners' expectations by 0.35 percent in December the index showed, up from 0.23 percent in November.

For all of 2015, appraisers' values exceeded homeowners' expectations by 2.25 percent in Las Vegas, the company said.

Las Vegas and the West seemed to buck the national trend reflected in the index, which derives from mortgage activity across more than 3,000 American counties. Quicken Loans said that overall, average appraised values for U.S. homes in December were 1.8 percent lower than homeowners' expectations.

Although December was the 11th straight month in which appraised home values fell short of homeowners' expectations nationally, it was the fourth straight month in which the appraiser-homeowner expectation gap narrowed, Quicken Loans said.

Quicken Loans Chief Economist Bob Walters said his company's data reflect patterns seen before and after the housing bubble, he said. Before the crash, homeowners' assessments were much higher than appraisers'; the appraisers, on the leading edge, saw the fall first, he said. As the market began rebounding, Walters said, appraisers were again ahead of the curve, seeing the rise before homeowners did.

Homeowners might be expected to subjectively skew expected values — a granite countertop's beauty is in the eye of its beholder.

"(But) there's a point at which homeowners and appraisers end up on the same page, and in many places we seem to be reaching a sort of equilibrium," Walters said, reflecting on Las Vegas' score. "It doesn't tell you that home values will rise or fall dramatically, it just tells you the market is what the appraisers and homeowners say it is.

"We're starting to conform to the things we saw seven or eight years ago, outside the crisis," Walters added. "The shocks that put valuations out of whack have started to cure and we're back to a more 'normal' situation."

Walters said Las Vegas seems to have reached value perception stasis, which helps buoy both home sales and mortgage refinancing, a little ahead of other markets that were especially hard-hit by the crash. He attributed this partly to churn. Las Vegas homeowners are less likely than peers in other markets to stay in homes for 20 or 30 years, he said; more frequent address changes may offer a more current, and accurate, sense of the market.

Also, he said, websites including Zillow, Trulia and Redfin, which let homeowners price their own homes and those in their neighborhoods, are helping boost market knowledge and bridge appraiser-homeowner price gaps everywhere. Sizing up markets used to be a lot harder, Walters said, requiring spotting "for sale" signs and knocking on doors.

Phil Dwyer, owner of Las Vegas-based Dwyer Home Appraisals, said he's seeing fewer disagreements about home values, perhaps because distressed homes, which once dominated the market and skewed prices, are far less common. Banks are no longer dominant sellers, he said; homeowners are dealing directly with buyers.

"The values (between the parties) seem to be a lot more closely aligned than they were five years ago," Dwyer said. "There are real buyers and real sellers and they're coming to similar expectations."

R. Scott Dugan & Associates Appraisal Co. owner Scott Dugan pointed to Greater Las Vegas Association of Realtors data from 2015 showing that the average difference between a home's list price and sale price was 2 percent and the median was 1 percent.

"Apparently, sellers will list homes for what they think they are worth, but the market will only pay 1 to 2 percent less," Dugan said by email. "It's the appraiser's job to appraise the property based upon the definition of 'market value' not the definition of "owner value.' In most cases, the value will be within range, however, in many cases, especially the higher-end product, sellers/appraisers may have a much larger gap."

Silver State Appraisers owner Bruce Feldman wasn't sure what to make of Quicken Loans' data. Home values, he said, can vary widely based on homes' age, amenities, condition and surrounding neighborhoods.

However, he said, informed real estate agents, armed with appraisers' reports, can inform clients about reasonable price expectations and limit disagreement.

"People only go by what they know and what they see," Feldman said. "A Realtor can come to me and say, 'This is what the client thinks (the home is) worth and this is what I think it's worth. It's worth doing an appraisal on it to find out what's right.'"

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