According to Zillow: Owners are misguided on home values

I have been saying this for a year. Sellers do not know how bad the market is and buyers do not know how good the market is. This proves my point about sellers.

clipped from columbus.bizjournals.com The reality of slumping real-estate values appears to be setting in for homeowners nationwide – maybe a bit too much. A new report from Seattle-based real-estate database Zillow.com found that half of all homeowners surveyed nationwide believe their own homes lost value last year, while 30 percent say they believe the value held steady. In reality, 65 percent of all homes lost value last year and only 7 percent maintained their value.

While Zillow’s data show a gap between perception and reality, an index the company compiles that compares a number of perceptions to reality showed homeowners were slightly more pessimistic on the whole than necessary, marking the first time the company has seen more negative sentiment than in reality.

In the Midwest, homeowners appear to be slightly more optimistic – and thus less realistic – than the nationwide average. Of those surveyed in the region, 46 percent believed their homes lost value and 31 percent told Zillow they believed value held steady. In reality, 64 percent of all homes in the Midwest declined in value, while only 7 percent held steady.

“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,” Zillow Chief Economist Stan Humphries said in a release.

Looking ahead, Zillow said homeowners appear optimistic about the course of home values over the next six month based on recent news of some housing market stabilization. Humphries said hopes might be too high.

“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,” he said.

Pollster Harris Interactive conducted the survey for Zillow, gathering online data from 2,215 adults from Jan. 8-12.