- HAR expects its housing market to remain cool for a 'little while.'
- A recent dip in $500,000+ home sales has negatively affected the metro's average sales prices.
- Data from Quicken Loans suggests now is a good time for homeowners to refinance.
Perceived by some sources as an overvalued market, Houston home values are likely to flatten this year. Several recent data sets focused on home prices suggest little upside may remain in the metro.
According to an index from Quicken Loans, in December the appraised value of a Houston home was 2.36 percent higher than homeowner perception. Since December of last year the gap between appraised value and homeowner estimate has narrowed by slightly more than 1 percent.
For homeowners looking to refinance this is good news, as they likely better understand the equity in their home, said Bob Walters, chief economist for Quicken Loans.
However, the roughly 2 percent value perception difference between appraisers and homeowners also signals that the days of year-over-year price appreciation may be coming to a halt.
Back-to-back months of Houston home value declines
Recent data from the Houston Association of Realtors appears to back this up. During both November and December of last year the average sales price of a Houston home dropped on a year-over-year basis. Most recently in December the price dropped by 0.6 percent to $280,201. However, in 2015 the average price did climb by 3.7 percent in comparison to 2014.
One reason for the back-to-back months of declining average prices, the lack of higher-priced transactions. During December the volume of $500,000 to $1 million homes that traded dropped by 17.2 percent year-over-year, while the volume of $250,000 to $499,00 sales was unchanged.
Considering December’s average price, appraisers valuing homes 2.36 percent more than homeowners equates to a $6,612 difference of opinion. Additionally a 1.01 percent narrowing of opinion between the two parties equals $2,830.
The data from Quicken and HAR comes after both Arch MI and CoreLogic dubbed Houston as a housing market that is roughly 20 percent above its long-term fundamental value.
