Many Homeowners Still in Denial About Prices

Zillow survey finds that many still think their property is protected from the downturn in the market.

By SHARE

Despite all the noise about the national housing crisis, many Americans remain naively optimistic about the value of their properties.

That's the gist of a survey recently released by Zillow:

This quarter, 49 percent of homeowners said they think their own home's value has increased or stayed the same over the past year. However, nearly three-quarters (74 percent) of homes have lost value in the past 12 months, according to preliminary analysis of Zillow's Q3 Real Estate Market Reports, which will be released Nov. 12...

Homeowners are not quite as confident as they were in the second quarter, when 62 percent said their homes either increased in value or remained the same, but a significant gap between the reality of home values and homeowners' perceptions persists. This is despite the timing of the survey - it was fielded from Oct. 7 to 9, during the worst week in stock market history...

"After one of the most turbulent quarters in history for the U.S. economy and housing market, you'd expect the reality of dropping home values to start sinking in," said Dr. Stan Humphries, Zillow vice president of data and analytics. "We are seeing some movement toward more accurate perceptions of home value declines, but there's still a significant gap between reality and perception. We're seeing a fascinating distinction in consumer psychology - on the one hand, homeowners appear to understand the reality of today's economy and are curbing their household spending, but on the other hand they still aren't ready to admit that these woes might extend to their own homes. There's clearly still some denial."