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February 11, 2009

Homeowners on their homes' value

Most homeowners think their home values have dropped in the past year, but they're fairly optimistic about the near future, according to a new Zillow poll.

Across the U.S., 57 percent of homeowners say their values are down -- more than those who said as much the last time Zillow did this poll, but still fewer than the number Zillow says have actually lost value. By Zillow's reckoning, about three-quarters of homes are worth less now than they were a year ago.

Asked what they think their home values will do in the next six months, only 30 percent said "decrease." Forty-three percent think their values will stay put and the rest are counting on upward movement. (On the other hand, nearly half say values in their local market will decrease, which suggests an element of "I'm immune but you're not, neighbor.")

As Zillow puts it, "homeowners are going where no economist dares to tread today -- they're calling a bottom."

The Northeast, which includes Maryland, has (according to Zillow) a lower-than-average share of decreasing values in the past year -- 71 percent. Northeastern homeowners fare best on Zillow's "Misperception Index" in part because they're a little more likely than average to think their values have dropped (58 percent). They're just as optimistic as the country overall about the next six months.

Harris Interactive, which conducted the poll for Zillow last month, says it can't offer a margin of error estimate because the online survey didn't draw from a probability sample. (That's your daily recommended allowance of wonk.) Just under 2,300 people participated.

Posted by Jamie Smith Hopkins at 8:10 AM | | Comments (4)
        

Comments

I think part of the reason that prices are staying high and days on market are increasing is that many buyers have little equity. Without a short sale, they can't reduce the price below the principal, so they're stuck. Like this guy:

http://www.zillow.com/homedetails/192-Stanmore-Rd-Baltimore-MD-21212/36413314_zpid/
http://sdatcert3.resiusa.org/rp_rewrite/details.aspx?County=04&SearchType=STREET&AccountNumber=09%20%200913555520

I agree with OSR that some of the sellers are holding out on their price so they can get out at least what they put in. After all, isn't home ownership the great American dream where you can always sell for more then you paid?
Isn't that one of the sweet little nothings whispered in our ear at closing?

I've been wondering how this stalemate can end. I sympathize with homeowners who are underwater, and have to sell. No one wants to bring money to the closing table. However, personal responsibility says that each one should make prudent decisions. When a wrong decision is made, you suffer the consequences. So there, the lesson is that make your home purchase decisions wisely. The idea that you're entitled to your money has to end.

Homeowners, RE agents, banks, counties, industry squawkers like zillow just about everyone has a motivation to hold values high. The only one who doesn't is also the only one who will decide where the bottom is. The buyer.

FYI... the buyer is far from ready to call a bottom.

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
Baltimore Sun articles by Jamie
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