Lower-cost Home Renovations Offer Best Value: Appraisal Institute

Chicago, IL – April 18, 2017 (PRNewswire-USNewswire) The Appraisal Institute, the nation’s largest professional association of real estate appraisers, today advocated that homeowners pursue smaller-scale renovation projects in order to maximize their potential return on investment.

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“The latest research shows that home improvements with a relatively low cost are most likely to generate a positive cost-to-value ratio,” said Appraisal Institute President Jim Amorin, MAI, SRA, AI-GRS. “Spending big dollars on major renovations doesn’t necessarily equate to a dollar-for-dollar return. In short: cost doesn’t necessarily equal value.”

According to Remodeling magazine’s most recent Cost vs. Value report, the projects with the highest expected return on investment are attic insulation (fiberglass), entry door replacement (steel), manufactured stone veneer and minor kitchen remodel. Other projects with potential payoffs, according to the report, are garage door replacement and siding replacement.

Amorin encouraged homeowners contemplating renovation projects to compare the planned improvement to what’s standard in the community.

“Projects that move a home well beyond community norms are typically not worth the cost when the owner sells the property,” Amorin said.

He also noted that homeowners might consider renovations simply for their personal enjoyment. While it’s nice to gain a solid return on investment, it’s certainly reasonable for property owners to upgrade just to enhance their quality of life, Amorin said.

For an unbiased analysis of what their home would be worth both before and after an improvement project, a homeowner can work with a qualified real estate appraiser – such as a Designated Member of the Appraisal Institute – to conduct a feasibility study.

The Appraisal Institute offers a free, informative brochure titled “Remodeling & Rehabbing,” which provides consumers with valuable advice on home improvement projects.

The Appraisal Institute is a global professional association of real estate appraisers, with nearly 19,000 professionals in almost 60 countries throughout the world. Its mission is to advance professionalism and ethics, global standards, methodologies, and practices through the professional development of property economics worldwide. Organized in 1932, the Appraisal Institute advocates equal opportunity and nondiscrimination in the appraisal profession and conducts its activities in accordance with applicable federal, state and local laws. Individuals of the Appraisal Institute benefit from an array of professional education and advocacy programs, and may hold the prestigious MAI, SRPA, SRA, AI-GRS and AI-RRS designations. Learn more at www.appraisalinstitute.org.

Homeowner Value Estimates Continue to Outpace Appraisals by a Widening Spread

– Quicken Loans’ National HPPI shows appraised values were 1.77% lower than homeowners estimated in March

– Home values rose 0.63% nationally in March, with a 3.30% year-over-year increase, according to the Quicken Loans HVI

Detroit, MI – April 11, 2017 (PRNewswire) Home values continued to rise in March, but not at the pace homeowners estimated across much of the country. On average appraisals were 1.77 percent lower than what homeowners expected, according to the Quicken Loans Home Price Perception Index (HPPI). This marks the fourth consecutive month the gap between homeowner estimates and appraiser opinions of value widened.

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Home values continued the upward movement of the last few months and maintained its positive trend which began in early 2012. Appraisals rose 0.63 percent from February to March, but showed strong growth of 3.30 percent year-over-year, according to Quicken Loans’ National Home Value Index (HVI).

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Home Price Perception Index (HPPI)

While home value perception varies across the country, The National HPPI shows a widening gap between what homeowners think their home is worth and the value appraisers assign. March is the fourth consecutive month of this growing trend, with appraisals 1.77 percent lower than homeowners’ estimates. On the other hand, appraisals are showing higher values than homeowners expected in some of the hottest housing markets, many of those on the West Coast.

“The national average shows appraisals lower than homeowner expectations, but some cities are bucking that trend,” said Quicken Loans Vice President of Capital Markets, Bill Banfield. “With prices sprinting forward in many of the booming housing markets in the West, it can be difficult for homeowners to keep up with appraisers, who are on the ground, examining real estate price changes every day. This study is one more reminder for consumers to keep an eye on their local market before selling or refinancing. The state of their local market could affect their home’s value – on either end of the spectrum.”

Home Value Index (HVI)

Quicken Loans’ HVI, the only measure of home value change based solely on appraisal data, showed another month of growth in March. Nationally, home values rose 0.63 percent from the previous month. When viewed annually, appraised values increase an average of 3.30 percent. The study showed the strongest monthly growth in the Northeast, with a 1.78 percent increase. However, the South had the fastest annual increase with a 4.67 percent rise in home values.

“Real estate signs are beginning to pop up, even before leaves appear on the neighborhood trees. As home selling season gets started across the country, enthusiastic buyers are battling for available homes,” said Banfield. “The increased attention to home sales has led to more competition for a relatively small inventory of homes, continuing to fuel the rising prices.”

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* A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeowner perceptions.

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* A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeowner perceptions.

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* A positive value represents appraiser opinions that are higher than homeowner perceptions. A negative value represents appraiser opinions that are lower than homeowner perceptions.

About the HPPI & HVI

The Quicken Loans HPPI represents the difference between appraisers’ and homeowners’ opinions of home values. The index compares the estimate that the homeowner supplies on a refinance mortgage application to the appraisal that is performed later in the mortgage process. This is an unprecedented report that gives a never-before-seen analysis of how homeowners are viewing the housing market. The HPPI national composite is determined by analyzing appraisal and homeowner estimates throughout the entire country, including data points from both inside and outside the metro areas specifically called out in the above report.

The Quicken Loans HVI is the only view of home value trends based solely on appraisal data from home purchases and mortgage refinances. This produces a wide data set and is focused on appraisals, one of the most important pieces of information to the mortgage process.

The HPPI and HVI are released on the second Tuesday of every month. Both of the reports are created with Quicken Loans’ propriety mortgage data from the 50-state lenders’ mortgage activity across all 3,000+ counties. The indexes are examined nationally, in four geographic regions and the HPPI is reported for 27 major metropolitan areas. All indexes, along with downloadable tables and graphs can be found at QuickenLoans.com/Indexes.

About Quicken Loans

Detroit-based Quicken Loans Inc. is the nation’s second largest retail home mortgage lender. The company has closed more than $300 billion of mortgage volume across all 50 states between 2013 and 2016. Quicken Loans moved its headquarters to downtown Detroit in 2010, and now more than 13,500 of its 16,000 team members work in the city’s urban core. The company generates loan production from web centers located in Detroit, Cleveland and Scottsdale, Arizona. The company also operates a centralized loan processing facility in Detroit, as well as its San Diego-based One Reverse Mortgage unit. Quicken Loans ranked “Highest in Customer Satisfaction for Primary Mortgage Origination” in the United States by J.D. Power for the past seven consecutive years, 2010 – 2016, and highest in customer satisfaction among all mortgage servicers the past three years, 2014 – 2016.

Quicken Loans was ranked #10 on FORTUNE magazine’s annual “100 Best Companies to Work For” list in 2017, and has been among the top-30 companies for the last 14 years. It has been recognized as one of Computerworld magazine’s ‘100 Best Places to Work in IT’ the past 12 years, ranking #1 for seven of the past eleven years including 2016. For more information, please visit QuickenLoans.com.

The White House Worth Just Shy of $400 Million

As a new president gets ready to move in, Zillow finds the value of the White House has appreciated 15 percent since Barack Obama’s inauguration in 2009.

Seattle, WA-Jan. 17, 2017 (PRNewswire) The White House, valued at $397.9 million according to the Zillow® home valuation, has appreciated 15 percent since the Obamas moved in eight years ago. The White House is the most valuable home on Zillow.

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Zillow first calculated the estimated value of the White House in 2009 using the proprietary Zestimate® algorithm, which provides a starting point for a home’s worth based on public data and recent sales. Zillow has Zestimate home valuesi on over 100 million homes — almost every home in the country.

President-elect Donald Trump will be the 44th president to move into the 55,000 square-foot homeii. Unlike some past presidents, luxury living is not new to Trump, who is moving from his three-story penthouse in The Trump Tower to one of the most famous homes in America.

The value of the White House, currently at its peak, is expected to appreciate 3 percent over the next year, in line with home value growth expected throughout Washington, D.C. Home values across the country have appreciated 6.5 percent over the past year and 9 percent since Barack Obama’s inauguration in 2009.

“President-elect Trump is moving into one of the most famous homes in the country — and, according to Zillow, it’s also the most valuable home in the country,” said Zillow Chief Marketing Officer Jeremy Wacksman. “President Obama’s term coincided with a massive recovery of the U.S. housing market, and that’s reflected in the updated value of the White House. Home values across the country are growing at their fastest pace since 2006, with many markets setting new records — one of the reasons why the White House is worth more now than it has ever been.”

The White House has 132 rooms, 32 bathrooms and sits on 18 acres. Notable features include basketball and tennis courts, a sun room and a library, all of which influence the home’s Zestimate. Were a potential buyer to take out a standard 30-year fixed mortgage on the White House today, the monthly payment would be about $1.6 millioniii, according to Zillow. The monthly rental payment would be just over $2 million per month.

Zillow

Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Zillow also sponsors the bi-annual Zillow Housing Confidence Index (ZHCI) which measures consumer confidence in local housing markets, both currently and over time. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ: Z and ZG), and headquartered in Seattle.

Zillow and Zestimate are registered trademarks of Zillow, Inc.

(i) The Zestimate home value is Zillow’s estimated market value for an individual home and is calculated for about 100 million homes nationwide. It is a starting point in determining a home’s value and is not an official appraisal. The Zestimate value is automatically computed daily based on millions of public and user-submitted data points taking into account special features, location, and market conditions. Read more here for more information on how Zillow calculates the Zestimate value.

(ii) President George Washington oversaw construction, but never lived in the White House.

(iii) The monthly mortgage payment assumes 20 percent down, a 4.2 percent interest rate and includes taxes, insurance, principal and interest.

U.S. Housing Worth Record-High $29.6 Trillion in 2016

The national housing market gained $1.6 trillion over the past year, a 5.7 percent increase from 2015

– Los Angeles is the most valuable metro, worth a cumulative $2.5 trillion.

– Portland, Ore. had the biggest increase in value among the largest housing markets, growing 13.4 percent in 2016.

– Renters paid a cumulative $478.5 billion in 2016, a 3.8 percent increase from 2015.

Seattle, WA – Dec. 30, 2016 (PRNewswire) The total value of the U.S. housing stock grew to a record-high $29.6 trillion in 2016, according to a new Zillow® analysis. The housing market saw a strong year of appreciation, growing 5.7 percent in value, or $1.6 trillion.

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The U.S. housing market has regained all the value lost during the housing crisis. The cumulative value of all homes in the U.S. declined by $6.4 trillion between 2006 and 2012 as the housing market collapsed.

A home is typically the biggest part of an individual or family’s wealth, and the cumulative value of the U.S. residential housing stock is similarly significant to the national economy. The U.S. GDP is an estimated $18.7 trillioni, nearly $10 trillion less than the value of all homes in the country.

Los Angeles and New York metros hold the highest shares of the country’s overall housing value, at 8.6 percent and 8 percent, respectively. The next most valuable metro is San Francisco, worth 4.2 percent of the overall housing value.

While several markets are now more valuable than they were at the height of the housing bubble, about 60 percent of the markets in the U.S. are still below the maximum values reached during the bubble years. For example, Chicago is still about $134 billion below the highest value it reached in 2006.

“Housing is incredibly important to us personally and to the economy as a whole,” said Zillow Chief Economist Dr. Svenja Gudell. “The U.S. housing stock is worth more than ever, which is a sign of the ongoing housing recovery. As buying a home gets more expensive, affordability remains a concern for many, and these numbers highlight just how much people are spending on housing. The total value of the housing stock grew nearly 6 percent this year, a pace that will likely mean some American families are priced out of homeownership.”

Renters this year paid $478.5 billionii, a $17.7 billion increase from 2015. About 635,000 new renter households formed in 2016, contributing to the amount of rent spent even as rent appreciation slowed. Apartment renters spent nearly $50 billion more than renters of single-family homes, as more multifamily construction became available this year.

Renters in the New York/Northern New Jersey metro paid the most this year, spending nearly $55 billion on rent.

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Zillow

Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Zillow also sponsors the bi-annual Zillow Housing Confidence Index (ZHCI) which measures consumer confidence in local housing markets, both currently and over time. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ: Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

(i) https://www.bea.gov/newsreleases/national/gdp/2016/pdf/gdp3q16_3rd.pdf

(ii) To calculate the total rent paid, we estimated the number of renter households in each metro area based on the U.S. Census Bureau’s 2005 through 2015 American Community Surveys (ACS), and households counts and metro-level homeownership rates from the Current Population Survey/Housing Vacancy Survey (CPS/HVS). ACS microdata files were downloaded from the University of Minnesota, IPUMS-USA. We then summed the monthly Zillow Rental Indexes (ZRI) for each year, including a forecast for November and December 2016 ZRI. (Actual November December 2016 data were unavailable at the time of the analysis). Finally, we took the product of the estimated number of renter households and the summed ZRIs for each metro, and scaled the results by a rental stock adjustment factor, which controls for differences in the footprint of the rental stock and the total housing stock. The rental stock adjustment factor was derived from the historical and recent relationship between ZRI and monthly contract rents reported in the 2015 ACS for each geography. Either the most recent year’s adjustment factor or the historical average adjustment factor was applied to 2016 data depending on the model cross sectional performance.