According to Zillow Q2 Homeowner Confidence Survey 62% of homeowners
believe their home's value has increased or stayed the same in the past
year yet 77% of U.S. homes actually declined in value
Short-Term Outlook: More optimism for own home vs. neighbors' homes in next
six months although 70% say they are concerned foreclosures will decrease
home values in their market within next year; 56% planning home
improvements
SEATTLE, Aug. 6 /PRNewswire/ -- Despite widely covered housing woes and
significant market data to the contrary, homeowners reveal high confidence
in the value of their own home with even greater optimism for the next six
months, according to the Zillow(R) Q2 Homeowner Confidence Survey(1) of
1,361 U.S homeowners conducted by Harris Interactive(R). Highlights of the
survey are below.
(Logo: http://www.newscom.com/cgi-bin/prnh/20060503/ZILLOWLOGO)
"Not My House!" Sentiment Showcases Wide Homeowner Perception-Reality
Gap Nearly two out of three (62%) homeowners think their home value has
increased or remained the same in the past year. Unfortunately, the reality
of the market is not quite as bright; in fact, it's getting worse.
Seventy-seven percent of U.S. homes lost value in the past 12 months,
according to preliminary analysis of Zillow's Q2 Real Estate Market
Reports, due to be released August 12, while only 19 percent increased and
5 percent remained the same. Whether it's apathy, confusion or just plain
denial, homeowners seem to believe the housing crisis affects every other
home but "not my house," underscoring a wide gap between homeowners'
inflated perception of their home values and the gloomy market reality.
To monitor this perception-reality gap over time, Zillow has created
the Home Value Misperception Index, which is the difference between the
adjusted percentage of homeowners who believe their home value increased
over the past year and the adjusted percentage of homes that have increased
in value(2). Nationwide, the Q2 Home Value Misperception Index is 32,
reflecting this broad gap. Those in the West, which has the highest
proportion of homes (88%) that declined in value during the quarter, seem
to have the best grasp on reality with a Misperception Index of 23, while
those in the South have the widest gap at 36.
Homeowner Perception
of Home Value
Change in Past Year US 2008 Northeast Midwest South West
My Home's Value Has Increased 40% 39% 39% 48% 28%
My Home's Value Has Decreased 38% 38% 39% 28% 56%
My Home's Value Has Stayed the Same 22% 23% 22% 23% 16%
Market Reality:
Homes Reporting Year-over-Year Value Changes in Q2, according to Zillow
Actual Percent of Homes
that Increased 19% 20% 18% 26% 9%
Actual Percent of Homes
that Decreased 77% 74% 77% 69% 88%
Actual Percent of Homes
that Stayed the Same (+/-1%) 5% 5% 5% 6% 3%
Home Value Misperception Index(2) 32 29 31 36 23
(NOTE: Column percentages may not total 100% due to rounding)
More Optimism for Own Home vs. Neighbors' Homes in the Short-Term:
Homeowner short-term outlook is even more optimistic than current
perception as three out of four (75%) homeowners expect their home value
will increase or stay the same over the next six months, with 25 percent
expecting a decline. The same level of optimism doesn't extend to
neighboring homes, however, as 42 percent expect values in their local
market to drop and 58 percent think values will increase or remain the
same.
More Foreclosures Expected Yet Half Oppose Government Bailout for Those
Facing Foreclosure: Four in five homeowners (82%) expect to see more or
about the same amount of foreclosures in the next six months as they did in
the last six. Already, more than nine out of 10 (92%) of all homeowners(3)
say there have been foreclosures in their local real estate market. Of
these, 70 percent are at least somewhat concerned that foreclosures will
decrease home values in their local market within the next year. Despite
these concerns, nearly half of all homeowners (48%) say homeowners who are
currently facing foreclosure because they took out an adjustable rate
mortgage or other loan that they can no longer afford should not receive
government assistance to stay in their homes. Only 28 percent support
government intervention and 24 percent "don't know."
Two-thirds (64%) of Homeowners Planning Home-Investment Activities in
Next Six Months:
-- 56% are planning major (e.g. replace the roof, remodel the kitchen)
and/or minor (e.g. install new garbage disposal, repaint or wallpaper a
room) home improvements, with 17 percent planning major improvements and 49
percent planning minor ones. Of interest is how the perceived change in
home value can impact home investment plans. Homeowners who believe their
home has increased in value are significantly more likely to plan major
home improvements (22%) than those who believe their home's value has
decreased (14%).
-- 7% are planning home financing activity [refinance their mortgage
(5%), take out a home equity line (2%), or take out a second mortgage (1%)]
-- 7% are planning to buy or sell a primary or secondary residence
[sell their home (5%); buy a new primary or secondary residence (4%)]
"Our survey reveals a wide gap between the perception homeowners have
about their own home's value and the realities of a market in which
three-quarters of homes declined in value in the past year. We attribute
this gap to a combination of inattention and a fair bit of denial that
causes people to believe their home is insulated from the woes of the
market that affect others, but not them," said Dr. Stan Humphries, Zillow
vice president of data and analytics. "This sentiment is also carried
through in homeowner confidence for the short-term as more people expect
their home to perform better in the next six months than the market and
recent past. Although many homeowners may believe the worst is over, we
think this level of optimism is out of sync with actual market
performance."
Zillow Q2 Conference Call: To join, dial toll free: 1-800-240-2430:
Join Zillow's VP of Data and Analytics Dr. Stan Humphries on Tuesday,
August 12 @ 11:00 AM PDT to discuss the Homeowner Confidence Survey in
concert with second quarter housing analysis. Register to participate in
live online presentation http://www.events.acttel.com/zillowmarketreports.
About Zillow.com(R)
Zillow.com is an online real estate community where homeowners, buyers,
sellers, real estate agents and mortgage professionals find and share vital
information about homes, for free. Launched in early 2006 with Zestimate
values and data on millions of U.S. homes, Zillow has since opened the site
to community input, data and dialogue. One of the most-visited U.S. real
estate Web sites, Zillow's goal is to help people become smarter about real
estate in every stage of the home ownership process -- buying, selling,
home improvement and financing. The company is headquartered in Seattle and
has raised $87 million in funding.
About Harris Interactive
Harris Interactive is a global leader in custom market research. With a
long and rich history in multimodal research that is powered by our science
and technology, we assist clients in achieving business results. Harris
Interactive serves clients globally through our North American, European
and Asian offices and a network of independent market research firms. For
more information, please visit http://www.harrisinteractive.com.
Zillow.com and Zillow are registered trademarks of Zillow, Inc.
Harris Interactive is a registered trademark of Harris Interactive Inc.
(1) The survey was conducted online by Harris Interactive within the
United States on behalf of Zillow.com between June 30, 2008 and July
2, 2008 among 2,067 adults ages 18+, of whom, 1,361 are homeowners.
Unless otherwise indicated, all data have been re-percentaged to
exclude "not sure" or "don't know" responses. This online survey is
not based on a probability sample and therefore no estimates of
theoretical sampling error can be calculated. A full methodology,
including weighting variables, is available.
(2) The Home Value Misperception Index is calculated from an adjusted base
of homeowners who think their home value has changed -- increased or
decreased -- and excludes "not sure" AND "remained the same"
responses. The Misperception Index is the difference between those who
think their home's value increased (51% adjusted, Harris Interactive
data) and the percent of U.S. homes that actually increased (19%
adjusted, Zillow data) in value year-over-year on an adjusted base of
home values that changed by more or less than one percent (excludes
homes that remained the same within one percent). Zillow data is
based on preliminary analysis of Q2 Real Estate Market Reports and
individual Zestimate(r) valuation of nearly 70 million U.S. homes.
(3) Data have NOT been re-percentaged to exclude "don't know" responses.
When asked if they think foreclosures in their local real estate
market have decreased their home's current market value, 33% said
"yes," 33% said "no," 26% said "don't know," and 8% indicated
"There are no foreclosures in my local real estate market."
SOURCE Zillow, Inc.
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Related links:
http://www.zillow.com
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CONTACT:
Sarah Mann of Zillow, Inc., +1-206-757-2701,
press@zillow.com
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