Friday, August 29, 2008

Zillow.com: Majority of US Homeowners Think their Home is Insulated from Housing Crisis

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Oh Americans.... at least we are an optimistic lot. Denial is not only a river in Africa...
  • "Not My House!" Sentiment Showcases Wide Homeowner Perception-Reality Gap Nearly two out of three (62%) homeowners think their home value has increased or remained the same in the past year. (editor note: WHAT???) Unfortunately, the reality of the market is not quite as bright; in fact, it's getting worse. Seventy-seven percent of U.S. homes lost value in the past 12 months, according to preliminary analysis of Zillow's Q2 Real Estate Market Reports, due to be released August 12, while only 19 percent increased and 5 percent remained the same.
  • Whether it's apathy, confusion or just plain denial, homeowners seem to believe the housing crisis affects every other home but "not my house," underscoring a wide gap between homeowners' inflated perception of their home values and the gloomy market reality.
  • Homeowner short-term outlook is even more optimistic than current perception as three out of four (75%) homeowners expect their home value will increase or stay the same over the next six months, with 25 percent expecting a decline.
  • The same level of optimism doesn't extend to neighboring homes, however, as 42 percent expect values in their local market to drop and 58 percent think values will increase or remain the same. (see how it works? we think the house in our neighborhood will fall but it won't affect our house) :)
  • Nearly half of all homeowners (48%) say homeowners who are currently facing foreclosure because they took out an adjustable rate mortgage or other loan that they can no longer afford should not receive government assistance to stay in their homes. Only 28 percent support government intervention and 24 percent "don't know."
"Our survey reveals a wide gap between the perception homeowners have about their own home's value and the realities of a market in which three-quarters of homes declined in value in the past year. We attribute this gap to a combination of inattention and a fair bit of denial that causes people to believe their home is insulated from the woes of the market that affect others, but not them,"
I see the same precepts that work in stock markets work in home prices ;) Who knew Kool Aid was also prevalent in Main Street USA :)

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