Posted by Rob Minton
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Zillow.com, a real estate website, has released its quarterly Homeowner Confidence Survey results for the third quarter of this year. As you can probably guess, homeowners across the country are a bit unsure about the value of their homes.
The survey, which Zillow does each quarter, tracks what homeowners believe about their home's value vs. what actual home values are in their region. The latest survey, conducted from Oct. 6 to Oct. 8 showed that:
- 25 percent of U.S. homeowners believe the value of their home increased
- 26 percent believe their home's value has stayed the same
- 49 percent believe their home's value decreased
According to Zillow, about 72 percent of homes actually decreased in value, while roughly 22 percent of all homes increased in value over the third quarter. The percentage of homes that decreased was quite an improvement from Quarter 2, which saw about 83 percent of homes drop.
Interestingly enough, what the site calls its "Misperception Index" -- the difference between what homeowners believe their house is worth vs. the home's real value -- shrunk in Q3. A value of zero would mean that homeowners' perceived value would be equal to real value.
In Q3, this index was at 10, three points better than the index of 13 in Q2 of this year, and seven points off the index value of 17 in the same third quarter of 2008. In other words, even though homeowners are still a little misguided regarding their home's value, the picture is apparently getting clearer to them.
The survey also found that the confusion isn't just with homeowners who think the value of their home is higher than it is. For example, 20 percent of homeowners in the Northeast responded that they believe their homes increased in value, while Zillow estimates that in reality about 31 percent of homes increased in value.
In contrast, homeowners in the West are the most likely to believe their home is worth more than it is. About 53 percent said their home decreased in value over the past year, while Zillow puts the actual number at 78 percent.
The survey also polled homeowners about where they see home values going in the next six months. A whopping 84 percent of homeowners thought their home's value was done dropping. In the next six months, 41 percent think their home's value will increase, while only 17 percent see it decreasing. About 43 percent think the value will remain the same.
Midwesterners were the most likely to respond that their home would increase in value over the next six months, but they were also the most likely to respond that their home's value would drop. With all that's going on with the housing markets around the country, can you blame them for the confusion?
Only time will tell what's in store for home values. The government's tax credits are helping lure buyers to the market, but impending foreclosures that are likely to hit the market could be the increased supply that offsets that demand.
Stay tuned.
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