Why Do Homeowners Over Value Their Homes

By
Real Estate Agent with Retired CA BRE# 01048160

Why Do Homeowners Over Value Their Homes

I would have to answer that question this way. Mostly because Brokers and news sources all broadcast that home values are close to the all time high. Who can blame homeowners, no one has said that lots of homes in specific locations went up in value but that it does not apply everywhere or specifically to their particular home.

What was left out of all the broadcasting and blogs is that real estate is very local and each area has it's own pricing history and values based on that particular neighborhood.

Even the National, State and Local Associations make the same broader statements about the communities, states general or median values. I think this concept has confused many homeowners and caused them to over value their own homes based on what they read.

An example that comes up a lot is the many neighborhoods and communities that make up the City of San Diego is often from the local news articles. The articles often articulate the median and many use the word average home value. Well, if you are homeowner and have an above average home, you might conclude that it is worth more than the average home value quoted. The reality is these numbers have no specific connection to any one home or more specifically to your home.

So if all this information touted out there is not relevant, why is their so much of it out there about values. The specific home value is unique to where it is located ( what neighborhood), lot size, view or no view, what model or styling and how has the home be ungraded beyond the average or standard construction. Certainly the age and condition also have a great deal of influence on both it's value and marketability. 

Who can blame the homeowners when all the same "blah blah blah" is repeated so often in the press and on line. It seems that very little clarifying of the relevance of the terms, median and average and certainly no specific information is forthcoming that defies the homeowner's assumption of value. When did you last read anything that says, "consult a local real estate specialist in your neighborhood when you want or need specific value information on your property". 

The problem really isn't what is out there as far as information is concerned, it is more specially that the usual information or at least good information that can be relied on, is NOT so plentiful.

 

 

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Kate Elim 09/17/2015 11:05 AM
  2. Will Nesbitt 09/18/2015 05:09 AM
  3. Morris Real Estate Marketing Group 09/21/2015 01:00 AM
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William Johnson
Retired - La Jolla, CA
Retired Real Estate Professional

Hi Nicole Doty - Gilbert Real Estate Expert , You win the golden ring too! Right one and it only gets worse when others who are not even qualified try to explain it.

Sep 18, 2015 05:07 AM #40
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William Johnson
Retired - La Jolla, CA
Retired Real Estate Professional

Hi Margaret Goss , Perhaps you have heard the expression that " No Good Deed Goes Unpunished". Keep doing what you are doing because it is so important that you do. Eventually, hopefully and with a whole lot of determination, you will break through.

Sep 18, 2015 05:10 AM #41
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William Johnson
Retired - La Jolla, CA
Retired Real Estate Professional

Hi Ken Jones , All I can say to your comment is " BRILLIANT" and it should be a headliner in the business section of all the newspapers across the country.

Sep 18, 2015 05:12 AM #42
Rainmaker
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Jill Sackler
Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY
LI South Shore Real Estate - Broker Associate

This post is great. As soon as owners read that median prices are up, they want to increase their sales price figuring it it applies to them specifically.

Sep 18, 2015 06:34 AM #43
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William Johnson
Retired - La Jolla, CA
Retired Real Estate Professional

Hi Jill Sackler , I would bet if the newspapers and Internet started saying that used car values are at an all time high and some are making serious profits on the increased values, with enough publicity, used car dealers would be soon overwhelmed and out of business. Perhaps that is the underlying idea behind all the mis-information.

Sep 18, 2015 06:43 AM #44
Rainmaker
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Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

No question about it, when inventory is low, and there's a feeding frenzy among home buyers, sellers seem more prone to over-price.  The risk of course, is that the property won't appraise, even should they find a willing buyer.

You're very right when you mention listening to national news media about housing markets, that are ever so prone to be local.  What holds true for markets in one place, is likely not be the same in another.

Sep 18, 2015 08:56 AM #45
Rainmaker
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Nina Hollander
Coldwell Banker Realty - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

William, you are absolutely so right on this subject that everyone touts the home prices, but forgets to talk about just how hyper-local real estate it. This is the flip side of mortgage companies touting low interest rates, but the "real" rate is very different because it's "hyper-local" to the individual borrower.

Sep 18, 2015 11:53 PM #46
Rainmaker
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Harrison K. Long
HomeSmart, Evergreen Realty - Irvine, CA
REALTOR , GRI, Broker associate, Attorney

William ... What information source and data about home values that is of importance to home sellers and buyers is what we are involved with each day to help our clients and customers. 

It's so true that real estate is very local and that each neighborhood and home has its own pricing history and values.

Sep 19, 2015 02:49 AM #47
Rainer
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Peter ReJune
United Realty Group - Palm Beach Gardens, FL
Trusted for Service, Respected for Results

Its no surprise sellers think their home is special and so worth more then they would pay, this is not a new phenomenon its always been that way and always will be. Very suspect website property valuatons just add to the problem and  lets not forget those many many many agents who agree with seller over valuations (Violation of the Code of Ethics) . Nothing new here to see, business as usual

Sep 19, 2015 10:29 PM #48
Rainmaker
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James (Jim) Lawson, DBA
DomainRealty.com LLC - Bonita Springs, FL
Broker Associate, RSPS, BPOR, HI & PE

I avoid price and value generalizations. Often not much you can deduct from them that's meaningful. I always focus on the data for a specific location over a given period of time. Your second paragraph says it all William. Well done!

Sep 22, 2015 02:00 PM #49
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Noah Seidenberg
Coldwell Banker - Evanston, IL
Chicagoland and Suburbs (800) 858-7917

Great explanation William. I think your answer and emotional attachment is the reason.

Oct 05, 2015 09:39 AM #50
Rainmaker
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Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

William, we saw this all spring and early summer, and sellers were still receiving offers over list price.  It has cooled a bit, so list prices have settled down.

Oct 08, 2015 10:57 PM #51
Rainer
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Anna Hatridge
R Gilliam Real Estate LLC - Farmington, MO
Missouri Realtor with R Gilliam Real Estate LLC

I agree that often what is tauted as average is not what the average buyers will pay.  Working with a seller right now that thinks their home is worth $40,000 more than any home has sold for in their neighborhood during the last 4 years.  Trying to figure out how to show them that the buyer's agent will love it that they list over priced so they will sell the neighbor's home. 

Oct 13, 2015 09:51 PM #52
Rainmaker
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Dorie Dillard CRS GRI ABR
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good morning William Johnson ,

Congratulations on a well deserved featured post! Real estate is local and these general statements on the whole state or country are so misleading. What holds true for markets in one place, is likely not be the same in another.

Oct 23, 2015 10:58 PM #53
Rainmaker
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Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

I noticed you haven't posted on Active Rain for a while and was wondering if all is OK?  Come back to the 'Rain!

Oct 25, 2015 08:12 AM #54
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Toni Weidman
Sailwinds Realty - Trinity, FL
20+ Years Selling Homes in New Port Richey, FL

We have the Tampa news discussing prices, etc. For some reason, sellers in our area think they should be the same as Tampa. Good post, William.

Nov 01, 2015 03:55 AM #55
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TeamCHI - Complete Home Inspections, Inc.
Complete Home Inspections, Inc. - Brentwood, TN
Home Inspectons - Nashville, TN area - 615.661.029

Good Friday evening William. Good explanation and congratulations on a well deserved feature.

Nov 06, 2015 08:51 AM #56
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William Johnson
Retired - La Jolla, CA
Retired Real Estate Professional

Hi Michael Thornton , Thank you for the much appreciated compliment.

Nov 08, 2015 03:01 PM #57
Rainmaker
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Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

William I blame it on those "rose colored glasses" many Realtors give the sellers:)), Endre

Nov 23, 2015 02:58 PM #58
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William Johnson
Retired - La Jolla, CA
Retired Real Estate Professional

Hi Endre Barath, Jr. , I can only imagine. You know, that would be a heck of a marketing tool. Get everyone rose colored glasses to hand out so the right marketing price will look good to the Sellers 

Nov 23, 2015 03:02 PM #59
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