Zillow Housing Survey Shows Homeowners Unrealistic On Prices

This quarter, 49 percent of homeowners said they think their own home's value has increased or stayed the same over the past year. However, nearly three-quarters (74 percent) of homes have lost value in the past 12 months, according to preliminary analysis of Zillow's Q3 Real Estate Market Reports, which will be released Nov. 12.

Perception-Reality Gap Shrinks in Third Quarter, but Many Still Show "Not My Home" Sentiment

Homeowners are not quite as confident as they were in the second quarter, when 62 percent said their homes either increased in value or remained the same, but a significant gap between the reality of home values and homeowners' perceptions persists. This is despite the timing of the survey - it was fielded from Oct. 7 to 9, during the worst week in stock market history.

Zillow's Home Value Misperception Index(2), which measures homeowners' perceptions of their home's value over time, shrank to 16 in the third quarter from 32 in the second quarter. An index of zero would mean homeowners' perceptions were in line with actual values.

Homeowners in the South and West had the most accurate perceptions of home values. In the South, where 67 percent of homes decreased in value, the Misperception Index was 13. In the West, where 85 percent of homes declined in value, the Misperception Index was also 13. Northeasterners' perceptions were most out of line with reality: 71 percent of homes there lost value, and the Misperception Index was 20.

Reported by Zillow.com