Home Value Predictor

Home buyers and investors often make their home purchase and property investment decisions based solely on appraisals and MLS-based information about housing prices. They assume that those sources provide accurate and reliable information that reflects the true market value of the properties they intend to buy, and all relevant current local information. However, this assumption is very incorrect.

Appraisers have been under tremendous pressures from mortgage brokers to overstate home values. These pressures were especially evident during the past decade, given the exceptionally aggressive mortgage lending that lead to the creation of the housing bubble. As appraisers receive over 95 per cent of requests for their services from mortgage brokers, it is obvious that many succumb to the pressures and artificially inflate housing prices. Moreover, appraiser can inflate home values by ignoring problems or comparing appraised homes with inappropriate comparators. As a result, if they rely on appraisals alone, home buyers may actually pay more for a home than what a home is actually worth. And in fact, many buyers actually did.

The Home Value Predictor™, which looks at current local socio-economic, demographic, and financial forces behind the changes in home values at the block level, is thus a more reliable indicator of actual values of homes at any particular time in any specific local market. It is also more useful as a decision-making tool than the information provided from appraisers or MLS sources because it offers a perspective into future trends in housing prices.

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