Are Homeowners Clueless About Their Home’s Value?
October 30th, 2008 categories: Real Estate Market
According to a recent survey by Zillow.com, the worst place in the world to find out how much your home is worth, only 51% of homeowners surveyed think that their home lost value in the last year.
32% thought the value of their home increased
17 % thought the value of their home stayed about the same
The author seemed stunned by this, remarking:
“There’s no doubt we’ve been deluged with depressing economic and housing news over the past few months. Every day is a new headline, every channel has a new pundit and the recession debate has shifted from “if” to “how long.”
I thought we were headed for a full-fledged depression? Nevermind. Zillow seems to think people must be pollyannish or have tissue in their ears while listening to the constant media attention on faltering home prices, subprime mortgages and bailouts. Even the title of their article analyzing the survey says a lot - “Strangely, “Not My House” Sentiment Continues, Albeit a Smaller Group.” So, if you think your home isn’t worth less than it was last year you’re a weirdo?
I have this expert analysis:
The survey doesn’t really account for why people think the value of their home may have increased. If you asked me, I would say “yes, my home increased in value because I just remodeled a bathroom and did some major landscaping.” People may in fact be justified in thinking their home has increased in value because of significant upgrades, renovations or improvements.
There may be another explanation. Their home may actually be in a market where home values are steady or in a market segment where there is demand for housing.
And yet one more, from GregC who commented on the article:
“Perhaps this is because for the vast majority of homeowners in the country the value of their home TO THEM has not changed.
It is still generating the imputed rent of a place to live and enjoy with their families. Perhaps they do take the long range view that their home has neither lost of gained value - to them - until they cash it out.”
Sure, there are sellers out there clinging to 2007 prices but as the market slows, we’ll find out who the motivated sellers are and aren’t. They’ll be the ones with the sold sign dangling from the white post in their front yard.
One last snipe against Zillow. I can’t trust anyone who can’t add. In the figure that breaks down the data by region and puts the figures into a pie chart, the Northeast’s pie chart doesn’t add up to 100%. According to the chart, 45% of people surveyed in the Northeast thought their home decreased in value, 23% thought it increased and 19% thought it stayed the same. 45+23+19=87. And I only scored a 575 on my math SATs.
