Zillow: Homeowners 'overly cynical'

Homeowners' previously upbeat views of their own homes' worth have become "overly cynical," according to a new survey released Thursday by property search and valuation site Zillow.com.

One in five homeowners, or 20 percent, thought their home's value had increased in 2009, while 28 percent of homes actually increased in value, according to the site.

The Zillow Home Value Misperception Index turned negative for the first time in the fourth quarter of 2009, to -2, the lowest score on record since the site started the survey in the second quarter of 2008.

An index score of zero would indicate that homeowners views were in line with actual home values, the survey said, while a negative or positive score would indicate either overly pessimistic or overly optimistic views, respectively.

Broken down, results were a bit mixed: 50 percent of homeowners believed their home was worth less at the end of 2009 than the year before, while in reality 65 percent of homes lost value. Almost a third -- 30 percent -- thought their home's value had stayed the same, while in reality only 7 percent of homes had remained unchanged.

The fourth quarter's misperception index fell 12 points, both year-over-year and quarter-to-quarter, from 10.

"Homeowners are finally succumbing to the notion that, in most areas, declining home values over the past year are no longer the exception, they are the rule," said Stan Humphries, Zillow's chief economist, in a statement.

According to Zillow, the "not my home" sentiment prevalent among American homeowners in past quarters no longer holds, and expectations of their home's future value and values in the overall market are closer together.

While in the fourth quarter of 2008, 47 percent thought values in their local housing market would fall within the next six months, only 30 percent believed their own home's worth would dip. ...CONTINUED

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