U.S. home appraisals were higher than sale prices 51% of the time in the first half of 2024 – and the gap between appraisals and sale prices is the highest that it has been since the start of the pandemic in 2020, according to a report from Corporate Settlement Solutions.
In 2020, 42% of homes were appraised above the sale price compared with 42% in 2021, 46% in 2022 and 50% in 2023, according to the firm’s data.
As of June 2024, the average over-appraisal was 9% among all markets analyzed.
The analysis provides the percent of homes that were over-appraised, under-appraised and appraised at the same value as the sale price (within $2,500.00). It focuses on the 10 states with the highest volume within Corporate Settlement Solutions’ footprint, which includes 19 states and the District of Columbia.
Among the 10 states analyzed, Kentucky had the highest percentage of orders (73%) that appraised over the sale price for the first half of 2024 with an average over-appraised value of 10%.
New York had the lowest percentage of homes (34%) that were over-appraised with an average over-appraised value of 5%.
North Carolina had the highest average over-appraised value at 33% for the first half of 2024.
In the under-appraised category, New York had the highest percentage of homes (14%) that were under-appraised with an average under-appraised value of 9% for the first half of 2024.
Virginia had the lowest percentage of homes (3%) that were under appraised with an average under-appraised value of 9%.
“The growing gap between home appraisals and actual sale prices underscores the challenges of providing accurate valuations in a rapidly appreciating market with limited inventory,” says Ashley Jelinek, CEO of Corporate Settlement Solutions, in a statement. “The big question is, how long will this continue given that many housing economists are suggesting that home appreciation is normalizing and, in some markets, even decreasing. It is inflection points like the one we may be approaching that emphasize the importance of accurate, market-centric valuations.”
Appraisal Value vs Sale Price Across 10 States for January-June 2024:
| State | % of properties appraised over sales price | % of properties appraised at sales price | % of properties appraised under sales price | Average over-appraised value | Average under-appraised value |
| FL | 54.39% | 40.35% | 5.26% | 7.68% | 13.25% |
| KY | 72.73% | 20.78% | 6.49% | 9.69% | 4.86% |
| MI | 51.85% | 43.21% | 4.94% | 8.32% | 8.12% |
| NC | 58.70% | 32.61% | 8.70% | 33.33% | 8.52% |
| NJ | 36.67% | 52.22% | 11.11% | 12.07% | 5.96% |
| NY | 33.62% | 52.34% | 14.04% | 4.60% | 8.52% |
| OH | 45.96% | 45.45% | 8.59% | 8.00% | 4.77% |
| SC | 41.94% | 48.39% | 9.68% | 2.48% | 5.82% |
| VA | 68.57% | 28.57% | 2.86% | 10.68% | 9.01% |
| WV | 63.18% | 29.96% | 6.86% | 9.21% | 9.02% |
| All | 51.12% | 40.48% | 8.4% | 8.86% | 7.37% |
Photo: Agence Olloweb