Each quarter Zillow tracks Homeowner Confidence by conducting a survey, along with Harris Interactive, to gage homeowner sentiment about the value of their home. When we started 6 quarters ago, perception and reality were quite far apart. But each quarter homeowners have come closer and closer to realizing that values have dropped nationwide, and the spread has narrowed.
However in Q3 of 2009, perception and real estate markets were literally all over the map. People in the Northeast were overly cynical about home values, while those on the West coast were overly optimistic.
From a national standpoint, when asked about their own home's value over the past year:
- 25% think their home's value has increased
- 26% think their home's value has stayed the same
- 49% think their home's value has decreased
In reality, 72 % of U.S. homes lost value over the past year, and 22% of homes increased in value. That's fewer homes declining versus Q2(83%), and a smaller Misperception Index of 10 (vs. 13 in Q2 and 17 in Q3 2008). A Misperception Index of zero would mean homeowners' perceptions were in line with actual values.
Here's a breakdown of homeowner perception vs. reality nationwide:
So what does the general public think about the future of their real estate market? The vast majority of homeowners - 84% - believes their home has reached a bottom and will not decline any further. Specifically:
- 41% think their home's value will increase in the next six months
- 43% think their home's value will stay the same
- 17% of homeowners think their home's value will decrease
There is a lot going on with housing right now, both organically in-market and with government stimulus, so it is hard to predict with any certainty what the future holds.
As Zillow's Amy Bohutinsky, Zillow VP of Communications put it - "Overly optimistic homeowners? Probably. Confused homeowners? Absolutely. And I don't blame them one bit." This is why it is so important people have professional representation to help interpret what is happening locally and maybe, to certain degree, even help look forward.
Curious about home value trends in your neighborhood, please visit Zillow's new and improve Local Info tab to see dynamic home value charts and neighborhood make up stats.