Home Values: Confusion Reigns
by ilene - November 19th, 2009 12:20 pm
Zillow reports on the actual changes in home values, as well as the perception/misperception of changes, in different regions over the last year. (My yellow highlighting) – Ilene
Confusion Reigns as Home Values Fluctuate Regionally; Northeastern Homeowners Overly Cynical About Home Values, But Western Homeowners Are Too Confident
Homeowners Across the Country Predict a Full Recovery in Next Six Months, According to Zillow(R) Q3 Homeowner Confidence Survey
SEATTLE, Nov. 18 /PRNewswire/ — Homeowner confidence was all over the map in the third quarter, as home values in some parts of the country stabilized while other areas saw continuing declines. Homeowners in the Northeast were the most cynical about their own homes’ values over the past 12 months, although the region posted the highest percentage of homes increasing in value during that same time period, according to the Zillow Q3 Homeowner Confidence Survey(1) and the Zillow Q3 Real Estate Market Reports.
One in five (20 percent) Northeastern homeowners believes their own home gained value in the past 12 months, according to the survey. But in reality, 31 percent of homes in the region increased in value, according to the Zillow Q3 Real Estate Market Reports.
That translates to a Zillow Home Value Misperception Index(2) of -6, which means Northeastern homeowners believe values performed worse than they did in reality – a first in Homeowner Confidence Survey(3) history. A Misperception Index of 0 would mean homeowners’ perceptions were in line with reality.
Homeowners in the West were the least realistic in the country, with 28 percent believing their own homes’ values increased in the past 12 months. According to Zillow, 17 percent of homes in the region actually increased, resulting in a Misperception Index of 17.
The Midwest had a Misperception Index of 8, while the South had an Index of 15.
Nationally, 25 percent of homeowners believe their own home’s value increased in the last 12 months. In reality, 22 percent of U.S. homes gained value. But fewer than half (49 percent) believe their home’s value decreased over the past 12 months, while 72 percent actually decreased. That discrepancy between perception and reality resulted in a Misperception Index of 10.
U.S. homeowners were also more optimistic about the future of their own homes’ values than at any time in the past six quarters. Two in five (41 percent) say their own home’s value will increase in the next six months.…