Are Boston Home Sellers Undervaluing Their Properties?


We may think we have a firm grasp of our market’s value, but new research suggests that’s not the case.


Boston homeowners undervalue their listings by 2.04 percent, at least compared to what certified appraisers judge as the value of the property.

That was the finding of Quicken Loans’ latest Home Price Perception Index (HPPI), which compares appraiser opinions in metro-area housing markets with homeowner estimates. Nationally, appraiser opinions were 0.40 percent below those of homeowners, down from March of last year, when appraisers valued properties 2.16 percent higher than homeowners.

Our graph below shows how the HPPI has changed from March 2014 to March of this year; a positive HPPI means that appraisers value properties more than homeowners, while a negative HPPI means they value it less:


Boston’s marketplace has undergone an interesting transformation, one that contradicts the national average. A year ago, appraisers were valuing Boston property 0.43 percent higher than homeowners were – meaning that homeowners, likely as a result of the downturn, were still undervaluing what their property was really worth.

Now, though, with low inventory pushing Boston home prices higher and higher, appraisers are valuing property even higher than a year ago; indeed, Boston’s HPPI has increased four-fold in just the last year.

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