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August 18, 2009

Homeowners on their home values

Most homeowners think their homes are worth less now than a year ago, but only one in five is expecting more drops in value here on out.

That's what people told real estate site Zillow in a July poll released today. The company's take on the results? "Hope springs eternal."

The Northeast, which includes Maryland in this survey, is more optimistic than average. Seventeen percent of homeowners polled expect their homes will drop in value in the next six months, compared with 19 percent nationwide. Thirty-eight percent of Northeasterners think their home values will rise.

(Midwesterners were the most pessimistic in this survey. But still, three in four are counting on stable or rising values for their own homes.) 

In a press release, Zillow suggested that it thinks homeowners are being a bit too rosy. Here's a statement from Zillow's chief economist, Stan Humphries:

“While their perceptions of past declines in their homes’ values have gotten more realistic over the past year, each quarter homeowners express the opinion that the worst is behind them. Unfortunately, that has not been the case thus far and it’s far from clear that it’s the case today. Despite some signs of slowing depreciation in many markets in the second quarter – the height of the 2009 home-buying season – there are many market fundamentals that will challenge home prices in the near-term: high for-sale inventory levels, foreclosures, negative equity, and price-to-rent ratios that still aren’t back to historical levels yet.”

On the Zillow blog, the company's vice president of communications wonders: "Are homeowners on to something the numbers aren’t showing? Or is this simply a coping strategy after many months of watching equity shrink away?"

The Zillow poll also asked if people thought their homes had lost value in the last year. Among Northeastern residents polled, 56 percent said yes. Zillow estimates that values actually dropped for 77 percent in the region. 

If you're chomping at the bit for the margin of error, I'm afraid I have to disappoint: Zillow said the poll, conducted online by Harris Interactive, "is not based on a probability sample and therefore no estimates of theoretical sampling error can be calculated."

Say -- let's do a real quick poll of our own:

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (4)
Categories: Survey says ...
        

Comments

I've been watching Zillow's figures on certain homes and neighborhoods in Baltimore for 2-3 years. About a year to 18 months ago they were totally out of wack in terms of being unrealistically high. Now, Z seems to have overcompensated for their earlier folly by going too far in the other direction. Not sure what science they're using, but I^m forced to take it with a huge grain of salt.

There's been a lot of debate over the accuracy of Zillow's "Zestimates." That's why I didn't trumpet the 56% vs. 77% stat.

Zillow's Zestimates doesn't work a lot of times in Baltimore City because about half the homes in my area are homes that need to be completed gutted. So they are not comparable homes at all, even if they have the same # of bedrooms & baths. This will lower your Zestimate.

Determining home values is always difficult.

Asking homeowners what they think their homes are worth will only give us part of the story-and a very subjective and wishful one.

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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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