4 ms·

If the houses on a large scale are not appraising for selling price, it could mean that the appraisers are wrong.

• linuxftw 8y ago
  I would say it means exactly this. If a surplus of people are willing to pay cash on top of appraised value, the appraised value is low.
• georgeburdell 8y ago
  Appraisers can only go by comparable sales (“comps”). In a rapidly rising market, comps always trail market value. I experienced this with my own Bay Area home purchase and had to shell out $40k to cover the difference between my offer and appraisal. Home prices at the time were going up 2% per month. Redfin et al now value my house at $90k over my offer
  • taurath 8y ago
    Fun idea if you have a lot of money - buy 20 houses in a relatively small area. Sell 3 to your Uncle Larry for 40% more than you bought them for, then sell the next 17, ratcheting each up about 5% for every 4-5 houses sold. Boom, you've now created a housing bubble and get to walk away with all the profits. If you do this over 2-3 years you might be able to get a 40% annual return, unless of course the market crashes before you can get out. I would not be surprised if this was what was happening just on a spread out and wide scale. All home sellers want the price to go up, so if the only way to make them go up is to sell at a higher price, you can prime the pump.