Home values are appreciating right now due to buyer demand being strong and available inventory being low. It's economics 101 - high demand + low supply = rising prices. It's not all good news though.
Every type of real estate market comes with it's own challenges, and the strong buyers market is no exception. With nationwide appreciation predicted to be 4% this year, banks and appraisers are struggling to keep up with rising prices and proper valuations.
Appraisers look for comparable type properties that have sold with in a recent time period to help them establish and appraised value. When prices are rising, the sale prices of recently sold homes can be lower than the current market. This can cause appraisals to come in under what the market value may be in today's market.
While appraisers try to take this into account, they are encouraged by banks to be conservative and not get ahead of the market.
This can be exacerbated by buyers agents and buyers offering full price or above price bids on available homes to try to get the deal. Appraisers then have trouble finding comparable prices to support the price on the purchase offer.
As always, the markets have a way of sorting this out and things will even out soon enough.
In the meantime, it's a great time to sell! If you're thinking about selling, call or text me at 419-779-6229, I'm a 30 year veteran of real estate, and will help you get top dollar for your home.
Kelley Knitz has been a RE/MAX agent for over 26 years and is in the RE/MAX Hall of Fame and is a long time member of the Toledo Board of Realtors Million Dollar Club.
1911 Indian Wood Circle
Maumee, OH 43537