Real estate site Zillow.com reported a disconnect in real estate reality vs. consumer perceptions — both in overestimating and underestimating actual changes in home values — based on its latest quarterly Homeowner Confidence Survey, released today.

Nationally, about 49 percent of survey participants reported that their home’s value decreased in the past 12 months, while Zillow found that 72 percent of homes decreased in value, based on the company’s estimates.

Real estate site Zillow.com reported a disconnect in real estate reality vs. consumer perceptions — both in overestimating and underestimating actual changes in home values — based on its latest quarterly Homeowner Confidence Survey, released today.

Nationally, about 49 percent of survey participants reported that their home’s value decreased in the past 12 months, while Zillow found that 72 percent of homes decreased in value, based on the company’s estimates.

The online survey was conducted for Zillow by Harris Interactive from Oct. 6 to Oct. 8 and had 1,471 homeowner participants and 2,081 total respondents.

Much closer to reality was the share of respondents who estimated their home’s value has increased in the past year, at 25 percent, compared with Zillow’s estimate of homes that increased in value, at 22 percent.

About 17 percent of participating homeowners said they expect their home’s value to fall in the next six months, while 43 percent expect it will stay the same and 41 percent expect it to increase.

Homeowners in the Northeast region were most likely to underreport home-value increases, Zillow reported. About 20 percent of homeowner participants in that region reported that their home value has increased in the past year, compared with Zillow’s estimate that 31 percent of homes in that region increased in value.

And homeowners in the West were overly optimistic about value rises, Zillow found: 28 percent said their home had a value increase in the past year, compared with the company’s estimate of a 17 percent actual rise in value.

That compares with the 53 percent share of homeowner participants in the West who believe their home lost value in the past year, and Zillow’s estimate that 78 percent of homes in that region lost value. …CONTINUED

Homeowner participants in the Midwest were most likely to believe that their home will increase in value in the next six months, compared with a low of 39 percent among participants in the South.

Interestingly, Midwest homeowners were also the most likely (18 percent) to anticipate a decrease in home values during the next six months, compared with a low of 15 percent in the West.

"Homeowners are clearly confused about the housing market, and with good reason," Zillow Chief Economist Stan Humphries said in a statement. "Home values in different parts of the country have shown varied performance in the third quarter."

And while there is "a high likelihood that home values will see further declines driven by an increasing number of foreclosures coming into the market and, possibly, rising interest rates after the first quarter of next year," Humphries also noted, "homeowners are holding onto the hope that home values have performed better than they have in reality" and appear "overly optimistic about future home values."

He added that while homebuyer tax credits can stimulate demand and may force a quicker bottom to the market, "It seems that homeowners are still working under the assumption of a V-shaped recovery to home values when a long, L-shaped recovery is more likely."

Even if there were a real estate market turnaround within the next 12 months, about 69 percent of homeowner respondents said they were "not at all" likely to put their home up for sale, compared with 17 percent "somewhat likely," 8 percent "very likely," and 6 percent "likely."

About 74 percent of Northeast homeowner participants and 67 percent of residents in the South said they would be "not at all likely" to sell in that event, while 11 percent of participants in the South and 2 percent in the West reported they would be "very likely" to sell.

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