Homeowner Confidence Dips Again with News of Declining Home Sales
We’ve come a long way from 2008.
Back then, when we first started fielding the Zillow Homeowner Confidence Survey, homeowners were convinced their homes weren’t declining in value (when most of them actually were), and were overly optimistic about the future of home values.
Not anymore. According to our second quarter Harris survey of 1,482 homeowners, homeowners are more pessimistic about the future of home values than they have been in the past three quarters. More than a quarter (28%) think home values in their local real estate market will decrease in the next six months, up from one-fifth (20%) in the first quarter. And fewer think home values will increase – 30% in Q2 versus 42% in Q1.
Not only that, but they’re pretty realistic about what has happened to the values of their own homes over the past year. Fewer than one-quarter (24%) believe their own home’s value increased in the past 12 months. In reality, according to the Q2 Zillow Real Estate Market Reports, 32% of homes increased in value during that time period. That varied by region, of course. More details are below.
The shift isn’t much of a surprise. Homeowners have been socked over the heads by dire news about their real estate markets for close to four years now. Yes, it took some time for perception to catch up with reality, but it’s clear how in-tune homeowners now are to news about the housing market. Much of the news recently has been about declining home sales with the expiration of the homebuyer tax credits, so it stands to reason homeowners’ expectations would also slide, and that they’d become more pessimistic in Q2.
A few glimmers of optimism did remain, however. Quite a few homeowners (38%) think home values in their local market have reached a bottom. Another 30% think the bottom hasn’t arrived yet.
You can find the full survey results in our press room. What do you think? Are home values in your local market at a bottom? Will they drop, stabilize or increase in the next year?