Half of homeowners believe their own homes lost value during 2009, while 30 percent believed their homes' values stayed the same. In reality, 65 percent of homes lost value during the year, and values remained the same for 7 percent.
"Not My Home" Sentiment Fades as Homeowner Attitudes Shift
The results demonstrate the "not my home" sentiment that was once prominent among American homeowners has faded. One year ago, nearly half (47 percent) of homeowners believed values in their local market would decrease in the next six months. However, when asked about their own home, fewer than one in three (30 percent) believed their own home's value would decrease.
Now that gap has shrunk, with 22 percent of homeowners believing their local market will lose value over the next six months and 14 percent believing their own home will lose value.
"Homeowners are finally succumbing to the notion that, in most areas, declining home values over the past year are no longer the exception, they are the rule," said Dr. Stan Humphries, Zillow chief economist. "Almost three times as many people believe their home's value will increase over the next six months as believe it will decrease in value, a level of optimism that is likely to outpace actual performance in the near-term. Given recent news about the stabilization of home values in some markets, I can see why homeowners are so optimistic. However, home values in many markets are still under substantial downward pressure from high levels of foreclosures and we don't believe we'll see a definitive bottom nationally until the second quarter of this year. We're not out of the woods yet."
Northeasterners and Westerners Most Cynical About Own Homes' Values:
Homeowners in the Northeast and West are overly cynical about the value of their home. Three-quarters (78 percent) of Northeastern homeowners said their home lost value or stayed the same in the past year when just over half (58 percent) of the homes actually did. This disparity between perception and reality resulted in a Misperception Index of -14, making Northeasterners the least aligned with reality. Western homeowners, who last quarter were the most optimistic and the least aligned with reality, did an about-face in the fourth quarter. They now are slightly cynical with a Misperception Index of -5.