Some Homeowners Overly Cynical on Home Property Values: Zillow
More and more, American homeowners are becoming convinced that the property values of their homes are falling, or at least aren't increasing, according to Zillow’s latest homeowner confidence survey, even when in some markets this may not be the case. According to the quarterly survey, one in five, or 20%, of the 2,200 homeowners surveyed believed their property value increased during 2009. That’s the lowest percentage in seven quarters. “Homeowners are finally succumbing to the notion that, in most areas, declining home values over the past year are no longer the exception, they are the rule,” said Zillow chief economist Stan Humphries. In reality, 28% of homes increased in value during the year, according to Zillow's Fourth Quarter Real Estate Market Reports. Additionally, half of homeowners surveyed believe their homes lost value in 2009, while 30% said their home’s value stayed the same. In reality, 65% of homes lost value during the year, and values remained the same for 7%. The results mark a shift in homeowner sentiment from 2009. Last year, 47% of surveyed homeowners said they believed values in their local market would decrease, when asked about their home, compared to this year where only 30% believed their own home’s value would decrease. This “not my home” sentiment has since changed. Now, 22% believe their local market will lose value over the next six months and 14% believing their own home will lose value. “Almost three times as many people believe their home's value will increase over the next six months as believe it will decrease in value, a level of optimism that is likely to outpace actual performance in the near-term,” Humphries said. “However, home values in many markets are still under substantial downward pressure from high levels of foreclosures and we don't believe we'll see a definitive bottom nationally until the second quarter of this year,” he added. “We're not out of the woods yet.” What wasn't immediately clear in the Zillow survey, however, is how homeowners can be considered "overly cynical" and "out-of-line with reality" as the press release puts it, yet at the same time still hold levels of optimism greater than actual performance as indicated above. Katie Curnutte, a source at Zillow, tells HousingWire, "Homeowners can be cynical as well as optimistic." "In the past, they’ve always overestimated the performance of their own homes’ values," she adds. "Now, they’re underestimating it. It’s true they’re not too far off, but there are still many who think their home’s value is worse off than it is." Write to Austin Kilgore.