Zillow: Perception Of Home Values Becoming More Accurate

Posted by Orb Staff on May 15, 2009 No Comments
Categories : Residential Mortgage

an homeowners' perceptions about home values are creeping closer to reality, though they are still a bit on the optimistic side, according to information from Zillow's Q1 Homeowner Confidence Survey. Sixty percent of borrowers believe their own home lost value during the past 12 months, the survey says. In reality, 80% of homes across the country lost value during the past 12 months, according to Zillow's first-quarter Real Estate Market Reports. Additionally, 18% believe their own home gained value in the past 12 months, and 22% believe its value remained the same. That resulted in a Zillow Home Value Misperception Index of five – the lowest it has been since Zillow introduced the index in the second quarter of 2008 – and down from 10 in the fourth quarter of 2008. A Misperception Index of zero would mean homeowners perceptions' were in line with actual values. Looking ahead, however, most homeowners – 74% – believe their home will not decline in value in the next six months. Specifically, more than one in four homeowners – 27% – think their home's value will increase in the next six months, while nearly half – 47% – believe their home's value will remain the same. ‘While homeowners are now more realistic when looking backward, they are still pretty starry-eyed when looking forward with three out of four homeowners believing that their own homes' prices will increase or be flat over the next six months," comments Stan Humphries, Zillow's vice president of data and analytics. "Unfortunately, there are few markets we expect to perform this well.’ The survey also found that potential sellers are holding back due to the current market. When asked about future plans to sell, 31% of homeowners said they would be at least ‘somewhat likely’ to put their homes on the market in the next 12 months if they saw signs of a real estate market turnaround. "With almost a third of homeowners poised to jump into the market at the first sign of stabilization, this could create a steady stream of new inventory adding to already record-high inventory levels, thus keeping downward pressure on home prices," Humphries adds. SOURCE:

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