For the past two years we’ve fielded the Zillow Homeowner Confidence Survey, measuring how homeowners perceive the value of their own homes, and how this compares to market reality. In the midst of the most precipitous home value slide in decades, it’s been a fascinating window into homeowner psyche — or as commenter DebtFree observed last quarter, similar to the Kubler-Ross model of “5 stages of grief.” Our last survey in Q4 2009 indicated homeowners had finally reached the “acceptance” stage of acknowledging their home value declines.
In this quarter’s Harris survey of more than 2,200 U.S. adults, we found that, much like Q1 market behavior, homeowner perception is literally all over the map. Homeowners in the West are overly cynical, believing their home’s value is doing much worse than reality. You can see this below in the Western region’s Misperception Index of -12 (a Misperception Index of zero would mean that homeowner perception is in line with reality). In the South, homeowners are overly optimistic with a Misperception Index of 14, believing their home’s value is performing much better than reality. And Northeastern homeowners are the closest to reality of any region, with a Misperception Index of -2.
This is the most regional variation we’ve ever seen in eight quarters of fielding this survey, showing a nation that’s clearly divided in homeowner confidence. However, when the data is aggregated nationally, we do see a general rise in optimism, with a national Misperception Index of 5, versus -2 in Q4 2009.
Meanwhile, when asked about future home values, homeowners across the board were optimistic about the future. The vast majority of homeowners – 82 percent – believe their own home’s value will not decline in the coming six months. Specifically:
• 39% think their home’s value will increase in the next six months
• 43% think their home’s value will stay the same
• 18% of homeowners think their home’s value will decrease
You can find full survey results today in our press room. Meanwhile, what do you think about homeowner confidence for the future, especially in light of new data on rising foreclosures and the end of the homebuyer tax credits? Are the 82 percent of homeowners who think it won’t get any worse being overly optimistic?