The Housing Chronicles Blog: Homeowners clueless or in denial about values?

Thursday, August 7, 2008

Homeowners clueless or in denial about values?

According to a story in the Wall Street Journal, a poll shows that 62% of homeowners across the U.S. think the value of their homes actually rose over the last year. So are homeowners in denial or just clueless? Well, considering that high school drop-out rates are reaching worrisome levels and people claim they never understood the loan documents they were signing, I'm going to have to vote for clueless, and thus ripe victims for scammers of all types:

In its second-quarter survey, released Wednesday, Zillow said that 62% of the 1,361 homeowners who responded said they believe the value of their home increased over the previous year.

But according to Zillow, that high level of optimism is out of sync with reality. Zillow's data show that 77% of U.S. homes depreciated in value over the past year, while only 19% appreciated.

The survey also found that homeowners plan to invest in their homes over the next six months. About 56% of all respondents said they would be spending money on improvements. Of those, about 17% said they would be spending money on major improvements, while 49% said they would be investing in minor improvements.

When asked about government efforts to bail out homeowners facing foreclosure, 48% of those surveyed said they oppose such efforts, even though 90% reported that foreclosures have occurred in their local market and 80% anticipate that the rate of foreclosures over the next six months will remain steady.

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