Value - Perception and Reality

Interesting study just published by Quicken Loans compares what people applying for refinance mortgages think their homes are worth compared to the value ultimately determined by an appraiser.  There's quite a difference based on geography:

Of course we're most family with the San Francisco market where the average 2-bedroom/2-bath condo sells for more than $1.2 million.  According to this study owners seeking to refinance that condo would estimate its value as about $25,000 less than the appraiser.

Frankly, I'm surprised there's such a LITTLE gap between the home owners estimate of value and the appraiser's calculation.  To me this suggests most owners seeking to refinance their mortgage are well informed about home values in their area.  San Francisco is almost obsessed with the cost of housing so maybe it's not surprising at all.

On the other hand, it's common to talk to prospective SELLERS who have an overly optimistic idea of the value of their property.  It would be interesting for someone to do a study of sellers initial perception/expectation of sales price vs. the actual sales price.

You can see the full Quicken report here.