Homeowners ready to call bottom

A quarterly survey of homeowner confidence by valuation and listings site Zillow found many homeowners are eager to list their homes for sale if they see signs of a turnaround, potentially unleashing a "shadow inventory" of homes that could put downward pressure on prices.

Although most homeowners believe their homes have lost value in the last 12 months, even more seem to think that homes prices will stabilize or bounce back in the next six months, Zillow said.

The survey found 60 percent of homeowners think their own home lost value in the last 12 months. Zillow said its analysis of market trends reveals that 80 percent of U.S. homes lost value in the last year.

While those numbers suggest some homeowners may be out of touch with reality, Zillow's "misperception index" -- which gauges how closely homeowners' perceptions track with market reports -- is the lowest it's been since the surveys began last year.

Zillow's misperception index registered 32 in the second quarter of 2008, when 62 percent of homeowners believed their home values had increased or held steady in the last year, but 73 percent of homes had lost value.

The misperception index shrunk to 16 in the third quarter, 10 in the fourth quarter, and registered five in the latest survey. An index of zero would mean homeowners' perceptions were in line with actual values.

Homeowners in the West were the most realistic, with a misperception index of two, while those in the Northeast were farthest from reality, Zillow said, with a misperception index of 11. ...CONTINUED

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