Owners misjudge home value trends
Survey: Perception is rosier than market realities
By Inman News, Tuesday, August 5, 2008.Perception does not match up with reality when it comes to home prices, according to the results of a survey of homeowners released today by real estate valuation and marketing company Zillow.
While about 62 percent of homeowners surveyed said they believe their home values have increased or held steady in the past year, the reality is that about 73 percent of U.S. homes lost value, according to an analysis of Zillow's second-quarter real estate market reports data, due out Aug. 12.
The company created a "Home Value Misperception Index" to quantify the difference between the adjusted percentage of homeowners who believe their home values increased in the past year and the adjusted percentage of homes that have increased in value, according to Zillow data.
About 75 percent of homeowners expect their home values to increase or remain level during the next six months, the survey also found, with 42 percent expecting overall values in their local market to drop and 58 percent expecting values to increase or remain the same.
Homeowners were least optimistic in the West, the survey found, with 28 percent of participants there reporting home-value increases in the past year, 56 percent reporting a decrease and 16 percent reporting unchanged values. But Zillow's home value data shows that 88 percent of homes in the West lost value in the past year, with 3 percent of homes remaining unchanged and 23 percent showing increased values.
Stan Humphries, Zillow's vice president of data and analytics, said in a statement, “Although many homeowners may believe the worst is over, we think this level of optimism is out of sync with actual market performance.”
The survey of 1,361 U.S. homeowners, conducted by Harris Interactive, revealed that about 82 percent of homeowners expect to see foreclosure activity rise or remain about the same in the second half of the year compared to the first half of the year, and about 92 percent of respondents say there have been foreclosures in their local real estate market.
Forty-eight percent of respondents said homeowners who are facing foreclosures because they secured an adjustable-rate mortgage or other loan they can no longer afford should not receive government assistance to keep their homes, according to the survey data.
About 28 percent support government intervention and 24 percent responded, "I don't know."
About 64 percent of homeowners are planning home investment activities in the next six months, 56 percent are planning major or minor home improvements, 7 percent are planning a home financing activity, and 7 percent are planning to buy or sell a primary or secondary residence.
"Homeowners who believe their home has increased in value are significantly more likely to plan major home improvements (22 percent) than those who believe their home’s value has decreased (14 percent)," Zillow reported.
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Submitted by Commercial Mortgage Loans - Privately Funded - MasterPlan Capital LLC on August 6, 2008 - 7:03am.
Anyone who has dealt with a homeowner who is selling FSBO knows that all homeowners think their home is worth more than it really is.
MasterPlan Capital LLC
Commercial Real Estate Investment Bankers
Commercial Mortgage Loans - Equity Financing - Asset Management
Online: http://www.masterplancapital.com - Quick Answers - Fast Closings - Professional Service.
Submitted by Wenceslao Fernandez Jr, BS, Realtor, CDPE on August 6, 2008 - 7:32am.
This phenomenom is still palpable in today's market, even while facing foreclosure.
The fear of having the lender go after them after the short sale with a deficiency judgement is still keeping homeowners holding on to the idea that they can get more for their home, even while in a distress situation.
I'm experiencing this with a seller right now and the way I'm trying to educate them is by not only seeing what has recently sold, but also to evaluate what their competition (other properties actively for sale), is doing.
Still, understanding how the bank is handling the deficiency is paramount in educating the seller and helping them make the right decision.
www.MiamiRealEstateKing.com
Certified Distressed Property Expert
Miami-Dade County, Florida.
Submitted by Ralph M on August 6, 2008 - 7:45am.
This article should have a title thereof "Owners and Real Estate Professionals Misjudge Home values"
Stop promising the seller just to get the listing.
www.aarsteam.com
Submitted by Susan Carrell on August 6, 2008 - 3:06pm.
I wish there could be some leadership and enlightened thinking in how to deal with these ridiculous loans. Here you have all these homeowners who are being shuffled out of their homes with no place to go and you have all these real estate agents with no income...and lenders unable to move off their "dimes". Put it all together...have the lenders carry out a massive training to hire the agents to help them clean up the mess they created.I am a property manager...when I see houses sitting fallow for no good reason, I go ballistic.I've been in real estate for 40 years and I've never seen such blatant incompetence.
Submitted by Michael Espiritu on August 6, 2008 - 3:42pm.
Most sellers have no clue about the value of their home. "Well I put in a $50,000 pool" that equates to $10,000-15,000 on a resale. If a buyer doesn't want a pool then the value is zero.
If a seller has an emotional attachment to the property their perception of value is even worse.
It is my job to show my clients the true market value through comparable sales data, market trends, etc. In Southern California if your price is wrong it will languish.
Price to sell or let some other sucker market it, show it, and waste valuable time and money. Properties are selling in my area but price is the key.Foreclosures on your street will negatively affect your home.
Zillow's valuations help to perpetuate the cluelessness of many sellers. How many times have you heard a seller say that "Zillow says my home is worth...?"
Clean data results in real numbers that show real value. Many sellers need a reality check!
Michael Espiritu
Broker
Copeland Wealth Management / CWM Real Estate
SoCal
Submitted by Jonathan Bentz on September 5, 2008 - 1:17pm.
There's a lot of negative news out there, no wonder most homesellers don't know who to believe. Even as an upcoming first time home buyer, I'm not really sure who to believe - the media or an agent. Anyone looking for a free home value estimate can get connected with local agents in their area for a real home value report by visiting GetMyHomesValue.com.