Perception does not match up with reality when it comes to home prices, according to the results of a survey of homeowners released today by real estate valuation and marketing company Zillow.
While about 62 percent of homeowners surveyed said they believe their home values have increased or held steady in the past year, the reality is that about 73 percent of U.S. homes lost value, according to an analysis of Zillow’s second-quarter real estate market reports data, due out Aug. 12.
The company created a "Home Value Misperception Index" to quantify the difference between the adjusted percentage of homeowners who believe their home values increased in the past year and the adjusted percentage of homes that have increased in value, according to Zillow data.
About 75 percent of homeowners expect their home values to increase or remain level during the next six months, the survey also found, with 42 percent expecting overall values in their local market to drop and 58 percent expecting values to increase or remain the same.
Homeowners were least optimistic in the West, the survey found, with 28 percent of participants there reporting home-value increases in the past year, 56 percent reporting a decrease and 16 percent reporting unchanged values. But Zillow’s home value data shows that 88 percent of homes in the West lost value in the past year, with 3 percent of homes remaining unchanged and 23 percent showing increased values.
Stan Humphries, Zillow’s vice president of data and analytics, said in a statement, “Although many homeowners may believe the worst is over, we think this level of optimism is out of sync with actual market performance.”
The survey of 1,361 U.S. homeowners, conducted by Harris Interactive, revealed that about 82 percent of homeowners expect to see foreclosure activity rise or remain about the same in the second half of the year compared to the first half of the year, and about 92 percent of respondents say there have been foreclosures in their local real estate market.
Forty-eight percent of respondents said homeowners who are facing foreclosures because they secured an adjustable-rate mortgage or other loan they can no longer afford should not receive government assistance to keep their homes, according to the survey data.
About 28 percent support government intervention and 24 percent responded, "I don’t know."
About 64 percent of homeowners are planning home investment activities in the next six months, 56 percent are planning major or minor home improvements, 7 percent are planning a home financing activity, and 7 percent are planning to buy or sell a primary or secondary residence.
"Homeowners who believe their home has increased in value are significantly more likely to plan major home improvements (22 percent) than those who believe their home’s value has decreased (14 percent)," Zillow reported.
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