The majority of homeowners believe their house is insulated from the housing crisis, which has seen 77% of the nation’s homes fall in value during the second quarter.
Zillow, an online real estate company’s second-quarter homeowner confidence survey found that 62% of homeowners believe their house has increased in value despite the nation’s widely reported housing woes and significant market data to the contrary.
And they’re even more optimistic looking ahead as they anticipate their house will be worth even more in six months. But many homeowners are concerned that foreclosures in their area could hurt home values over the next year.
Zillow said preliminary results of its second-quarter real estate market report, to be released Aug. 12, show 77 percent of the nation’s homes dropped in value during the second quarter, while 19 percent rose in value and 5 percent stayed the same. The figures don’t add up to 100 due to rounding.
“Whether it’s apathy, confusion or just plain denial, home owners seem to believe the housing crisis affects every other home but ‘not my house,’ underscoring a wide gap between homeowners’ inflated perceptions of their home’s value and the gloomy market reality,” Zillow said.
The company has created an index to measure the disparity, called the Home Value Misperception Index. Nationally, the index stood at 32 in the second quarter. The West, with the highest proportion of homes that declined in value during the second quarter at 88 percent and significant foreclosure activity, has the narrowest gap between reality and home values as measured by an index reading of 23. The South had the widest gap with reality, with an index reading of 36.
Zillow’s findings are based on a survey of 1,361 U.S. homeowners conducted by Harris Interactive.