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

A year later, those numbers were 22 percent and 14 percent, respectively. Almost half — 47 percent — thought the value of their home would stay the same in the next six months, and 38 percent thought it would improve.

That overall outlook may be too cheerful.

"Almost three times as many people believe their home’s value will increase over the next six months as believe it will decrease in value, a level of optimism that is likely to outpace actual performance in the near-term," Humphries said.

"… Home values in many markets are still under substantial downward pressure from high levels of foreclosures and we don’t believe we’ll see a definitive bottom nationally until the second quarter of this year. We’re not out of the woods yet."

The Northeast was the most pessimistic of four regions with homeowners there achieving a -14 on the misperception index, an eight-point drop from the previous quarter and a 17-point drop from the same quarter the year before.

Home values jumped the most in that region last quarter — 42 percent — compared with 29 percent increases in the Midwest and the South and a 21 percent gain in the West. Yet, only 22 percent of homeowners thought their own home’s value had increased.

At -5, Western homeowners were the second-most pessimistic, despite the jump in home values and despite being the most optimistic region in the third quarter of 2009 when the region’s score was an unrealistic 17. Nevertheless, that region did see the biggest percentage drop in home values, 73 percent, compared with 64 percent in the South and the Midwest and 49 percent in the Northeast.

The South’s homeowners were the most aligned with reality with a score of zero last quarter, while the Midwest’s homeowners came close with a 3.

In expectations for the next six months, the four regions did not differ widely: in all, between 11 percent and 20 percent expected their home’s value to fall, between 42 percent and 51 percent expected it to stay the same, and between 38 percent and 39 percent expected it to rise.


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