No longer are homeowners in denial about home values.
That’s the takeaway from Zillow’s latest Homeowner Confidence Survey released Thursday. For the first time during the current real estate recession, most homeowners have come to grips with the fact that their homes have lost value during the past year.
Though they may have accepted the reality of the past, most homeowners are still optimistic about the future. Most homeowners - 74 percent - believe their home will not decline in value in the coming six months, effectively calling a bottom to their own home’s housing slide. One in four homeowners (27 percent) think their home’s value will increase in the next six months, while nearly half (47 percent) believe their home’s value will remain the same. Homeowners were similarly optimistic when it came to predicting home values in their local markets. About two-thirds of homeowners believe home values in their local markets will increase (26 percent) or stay the same (37 percent) over the next six months. Thirty-seven percent believe home values will decrease.
The survey found that a significant number of potential sellers are holding back due to the current market. When asked about future plans to sell, 31 percent of homeowners said they would be at least “somewhat likely” to put their homes on the market in the next 12 months if they saw signs of a real estate market turnaround(3).
“The perception of American homeowners is finally catching up to reality, which is that 80 percent of all homes in the country lost value during this past year,” said Dr. Stan Humphries, Zillow’s vice president of data and analytics. “While homeowners are now more realistic when looking backward, they are still pretty starry-eyed when looking forward with three out of four homeowners believing that their own homes’ prices will increase or be flat over the next six months. Unfortunately, there are few markets we expect to perform this well.
“Also interesting is the information we have for the first time this quarter on the levels of ’shadow inventory’ - homes that people would like to sell but that aren’t currently on the market, and thus aren’t captured in the official number of homes on the market. With almost a third of homeowners poised to jump into the market at the first sign of stabilization, this could create a steady stream of new inventory adding to already record-high inventory levels, thus keeping downward pressure on home prices.” Humphries said.
Here are more graphics from the survey: HCSResultsQ120091.pdf