It’s a topic dominating the headlines, news shows and the race for president. You’d have to be living under a rock to not know the housing market is in distress and home values are dropping…. right?
Apparently not – at least when it comes to our own homes. Today Zillow released our Q2 Homeowner Confidence Survey — asking more than 1,300 U.S. homeowners their perception of their own home’s current value, as well as what they think will happen with their home and local market in the coming 6 months. The results were eye-opening, to say the least…
- 62% of U.S. Homeowners believe their home’s value has increased or stayed the same in the past year. In reality, 77% of U.S. homes have declined in value over the past 12 months.
- People living in the West seem to be a little more realistic, with 44% believing their home’s value has increased (28%) or stayed the same (16%); however more homes in the West have lost value, with 88% of Western homes declining over the past year.
This chart breaks out the difference in homeowner perception vs. reality by region.
Looking into the future, homeowners continue to be optimistic — about their own homes, that is. Three out of four (75%) homeowners expect their home’s value will increase or stabilize in the coming 6 months. However, when asked about their local market, 42% think home values in their locality will decrease (compared to the 25% who think this about their own home). Clearly we think it’s the neighbor’s house that will be affected, not ours.
Unfortunately I’m not a psychologist to analyze what the heck is happening here… but it’s not a far stretch to call it denial. Or as my boss Spencer Rascoff said the other day — if you ask people if they have an above-average IQ, 90% of people think they do. Wishful thinking.
What do you think is driving this perception gap? And will it change in the coming months? We’ll let you know next quarter…
If you’d like to learn more about what’s happening in your local market, next week we’ll release our Q2 Real Estate Market Reports, which chart home value changes for 165 metropolitan statistical areas, the largest report of its kind. New this quarter, we’ll also look at % of homes sold for a loss, and % of home sales that were foreclosures. You can tune in to our Q2 Market Reports Conference Call on August 12 at 11am PT, to hear Dr. Stan Humphries discuss these reports as well as some more findings from today’s survey. To sign up for the Web version of this call, visit www.events.acttel.com/zillowmarketreports. Or, you can dial in directly at 1-800-240-2430.