News Flash – Everybody ELSE'S House Has Lost Value But Mine

The Majority of U.S. Homeowners Thinks Their Home is Insulated from the Housing Crisis

According to Zillow Q2 Homeowner Confidence Survey 62% of homeowners believe their home’s value has increased or stayed the same in the past year yet 77% of U.S. homes actually declined in value

 

Short-Term Outlook: More optimism for own home vs. neighbors’ homes in next six months although 70% say they are concerned foreclosures will decrease home values in their market within next year; 56% planning home improvements


SEATTLE (August 6, 2008) –  Despite widely covered housing woes and significant market data to the contrary, homeowners reveal high confidence in the value of their own home with even greater optimism for the next six months, according to the Zillow® Q2 Homeowner Confidence Survey of 1,361 U.S homeowners conducted by Harris Interactive®.  Highlights of the survey are below.

“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.  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. 

To monitor this perception-reality gap over time, Zillow has created the Home Value Misperception Index, which is the difference between the adjusted percentage of homeowners who believe their home value increased over the past year and the adjusted percentage of homes that have increased in value.  Nationwide, the Q2 Home Value Misperception Index is 32, reflecting this broad gap.  Those in the West, which has the highest proportion of homes (88%) that declined in value during the quarter, seem to have the best grasp on reality with a Misperception Index of 23, while those in the South have the widest gap at 36.

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