A Real Estate Discussion Blog

head_left_image

Homeowner Optimism Continues To Grow - Good Or Bad Thing?

Our quarterly Homeowner Confidence Survey, conducted in partnership with Harris Interactive, was released today. How you feel about the results could depend on what side of the table you are on.

This is the third quarter in a row where homeowners as a majority have predicted that we’ve reached the bottom, believing that their personal home value will not decrease any further. Of the past three quarters, this quarter people were the most optimistic.Homeowner Perception Vs Reality

  • 34% think their home’s value will increase 
  • 47% think their home’s value will stay the same
  • 19% of homeowners think their home’s value will decrease. 

Those numbers represent what people think of the future. How do they feel about the past quarter?

  • 22% think their home’s value has increased
  • 19% think their home’s value has stayed the same
  • 60% think their home’s value has decreased

Unfortunately, this isn’t what our national numbers show. According to analysis of Zillow’s Q2 Real Estate Market Reports, 83% of U.S. homes declined in value over the past year – up from 80% in Q1.

When we look at what people think happened to their home values, verses what our numbers actually show, we are able to calculate a Home Value Misperception Index and compare it quarter to quarter. For Q2 of 2009 this index is 13 (zero would mean homeowners’ perceptions were perfectly in line with actual values), compared to 6 in Q1 and 11 in Q4 2008.

Going back to my opening line of how this affects you could depend on who you are representing. A growing Misconception Index could mean that is may be harder to convince Sellers of a realistic listing price. On the other hand, the renewed optimism may mean more Buyers come off the fence and are more realistic with their offer prices.

Either way, let’s hope this renewed optimism continues to grow to the point where attitude could be an effective ‘stimulus package’.

 

 

 

Perceptions can vary region to region:

zillow homeowner perception regional

 

-------------------------------------------------------------------------------------------

 

   Thanks for reading!  Subscribe here to be alerted of blog updates. rss sara bonert blog zillow  

Want to learn how to use Zillow better?  Check out:

 

 

I'm on Twitter too! Follow me at @sbonert

 

Comment balloon 12 commentsSara Bonert • August 18 2009 08:43AM

Comments

I think this is a bad thing.  The homeowners apparently have been watching too much news, which has been biased towards a housing recovery, which is simply not true.

If homeowners want to sell, they need to price it correctly, and they won't be pricing it correctly if they think the market has turned the corner.  Ultimately this means more properties will be sitting on the market, driving prices lower.

Posted by Mark MacKenzie almost 11 years ago

I agree about the pricing correctly.  It seems that the homeowner want to overprice, and these homes just do not sell. wasting all our time.  

www.charlottelakewyliehomes.com

Posted by Ginger Moore (Wilkinson & Associates Realty) almost 11 years ago

If homeowners were keeping their ears to the wall they would realize that the other shoe hasn't even dropped yet. I'm not trying to rain on anyones parade but the fact is we've only been dealing primarily with the sub-prime debacle. What about all those prime and jumbo ARM's coming due in the next couple of years? I think we still have a pretty bumpy road ahead.

My industry which happens to be Manufactured Home foundation inspections, installations, retrofits and repairs is like a barometer for the RE industry as most folks living in Manufactured Homes tend to be seniors living on fixed incomes or low income families or individuals who can't afford a site built home. We have been working with Real Estate and Mortgage brokers and agents nationwide for over two decades doing engineered certifications, affidavits of affixture and 433a documentation (California only)

Beleive me the first industry to slow down is the Manufactured Home industry which started slowing down in mid 2005. Thus far we have noticed a slight increase in volume largely because of the government intervention and related bail out programs and FHA being so much more pervasive and aggressive in the Real Estate lending arena. But we're still a long way from any kind of long term recovery I feel.

In fact this post has inspired a notion for another post. So I think I'll be running along while the urge and energy is still flowing. Thanks for the juice. Check out our blog: THE PREMIER MANUFACTURED HOME BLOG

Posted by John DL Arendsen, Crest Backyard Homes "ADU" dealer & Contractor (CREST BACKYARD HOMES, ON THE LEVEL GENERAL & FACTORY BUILT HOME CONTRACTOR, TAG REAL ESTATE SALES & INVESTMENTS) almost 11 years ago

Thanks all for the comments.  What actually worries me more is the inventory that could hit the market when people feel like the recession is over. 

We did a survey the other day that found 30% of the people asked were waiting for some sign of recovery and then they would list.  If there are 90-100M homes in the US- that is A LOT of shadow inventory lurking as a backlog of people who have held off listing for one reason or another.  Obviously this will affect inventory levels, and we all know what that can mean with prices.

On the other hand, it is nice to hear people are more optimistic.  With all the number crunching and forecasting we do, optimism definitely has its place in the recovery formula. 

Posted by Sara Bonert, Real Estate Internet Marketing (Zillow) almost 11 years ago

We are having slight price increases in our area.  It does not mean a long term homeowner has an accurate view of what the house is worth.  I do not trust Zillow and feel that Zillow evaluates homes on a formula that may or may not be near correct, but consumers ignore the disclaimer and assume Zillow is correct. 

Perhaps instead of publishing an estiamted price Zillow should give detailed statitics about price per SF in an area, how lot size effects price etc . . . and then suggest how a home may fit into that model.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) almost 11 years ago

Again, that's were hyper local CMA's come into play.  For years I would not take overpriced listings but lately there haven't been comps for some properties in some areas and we have to do our best.  For those "special" homes I thought might have a chance listing at a little over what I felt market value to be, it didn't do the seller or me any good.  I'm back to the stance of not taking any listing even if it's only a little overpriced.

It is always going to be simple supply and demand.  In our area, supply still outweighs demand which naturally brings prices down.  If a seller cannot understand that, they can list with someone else.  I just had a seller call me back today that wouldn't list with me at my suggested price.  The listing expired with the other agent that did and now I'm telling her that the price I mentioned before is too high as the market keeps declining.

Posted by Judy Orr, SW & Near West Chicago suburbs (HomeSmart Realty Group) almost 11 years ago

Looking at the actual number and the perception....both do not look good.  You are right about the shadow inventory that banks are holding onto in efforts not to sink their balance sheets. 

Additionally, there is definitely another round of foreclosures coming with Alt-A loans adjusting.  Not to mention all the commercial loans that are tanking.   It's going to be a long road to recovery!  

Posted by Greg Saunders (WealthPoint Realty) almost 11 years ago

I can see this as being a huge problem, "We did a survey the other day that found 30% of the people asked were waiting for some sign of recovery and then they would list."

We have yet to work through all of the subprime mess, banks have their own shadow inventory, prime defaults are surging, and now this?

Wow.

Posted by Mark MacKenzie almost 11 years ago

This is a case where perception is much more important than reality.  I'm also curious as to how Zillow goes about conducting it's surveys of the public before putting too much faith in their results.  Do they survey by mail, over the phone, only on their site, etc.  Looking back at the regional map, its says only 2258 home-owner were surveyed online, that's not a very good sample; I'm suprised they would even present that as statistically valid data.

Here's the total number of owner-occupied housing units, per the 2007 US Census Bureau statistics, 75.1143 millions.  (Found using occupied housing units [110.3 million] * Percent owner-occupied [68.1%].)

http://www.census.gov/compendia/statab/files/house.html

Posted by Joseph "Cathan" Potter (Coldwell Banker) almost 11 years ago

This is a problem, one owner jsut said he is waiting to list when the price goes up. Little does he know interest rates are alsongoing up soon and this will take potenial buyers out of the running.

Posted by Barbara Tretola (RAC Real Estate Associates, Inc.) almost 11 years ago

I had an agent tell me the other day that the market hit bottom last fall.  I was not about to get into a debate about it, but apparently some agents are just as dillusional and buyers/sellers.

Posted by Jenny Durling, For Los Angeles real estate help 213-215-4758 (L.A. Property Solutions) almost 11 years ago

Great post and comments.  Nothing is either good or bad, but thinking makes it so. 

Posted by Mike Henderson, HUD Home Hub - 303-949-5848 (Your complete source for buying HUD homes) almost 11 years ago

Participate