Homeowners More Optimistic About the Future Than Any Time in Past Year
Four times a year, we field a survey with Harris Interactive to get a pulse on how homeowners perceive the value of their own homes and their local real estate market. Our quest – to find out how realistic homeowners are about their own homes’ values, and how optimistic (or not) they are about the coming six months.
It’s a fascinating trip into the psyche of owning a home in the midst of the greatest housing recession of our generation. Are we realistic? Are we in denial? We’ve seen it all in the past year, and this quarter’s results are telling of a group that largely “gets it” about the bad news, but just wants things to get better. By the numbers, here’s what we found:
Similar to Q1, most homeowners acknowledge that their own home’s value has declined over the past year:
• 22% think their home’s value has increased
• 19% think their home’s value has stayed the same
• 60% think their home’s value has decreased
But – 83% of U.S. homes declined in value over the past year, according to analysis of Zillow’s Q2 Real Estate Market Reports – up from 80% in Q1. With more homes losing value, the “misperception gap” between homeowner perception and reality grew to a Home Value Misperception Index of 13, up from 6 in the first quarter, and up from 11 in Q4 2008. An index of zero would mean homeowners’ perceptions were in line with actual values.
Along with growing misperception is a growing optimism that home values will not continue their declines in the coming six months. For three quarters in a row, homeowners have effectively called a bottom, with the majority thinking their home’s value will not decline any further. This quarter, the number of “optimists” was our largest yet:
• 34% think their home’s value will increase
• 47% think their home’s value will stay the same
• 19% of homeowners think their home’s value will decrease
The most optimistic bunch are homeowners in the South and Northeast, where fewer markets experienced a “bubble,” and where home value declines haven’t been as precipitous as many major cities in the West.
Are homeowners on to something the numbers aren’t showing? Or is this simply a coping strategy after many months of watching equity shrink away? Every market is obviously different, and we’d like to hear what you think about homeowner perception, and its impact, in your area.
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