If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that closed recently) to defend the price when performing the appraisal for the bank. Some agents claim appraisers are the grim reaper of home values, others take the time to study the market and the appraisal is just another obstacle in the grand scheme of a home purchase.
An interesting metric: Every month, Quicken Loans measures the disparity between what a homeowner believes their house is worth as compared to an appraiser’s evaluation in their Home Price Perception Index (HPPI). Here is a chart showing that difference for each of the last 12 months. Check it out: