Home prices in the state of denial

[hipmatt]

http://biz.yahoo.com/cnnm/080207/020708_homeowners_views.html?.v=10&.pf=real-estate

By Chris Isidore, CNNMoney.com senior writer

Despite numerous reports showing home values in historic decline, more than three out of four homeowners believe their own home has not lost value in the past year, according to an online survey.

The survey was conducted by Harris Interactive for Zillow.com, a Web site that gives estimated home values.

ADVERTISEMENT
The survey of 1,619 homeowners found 36% believe their home has increased in value, and another 41% believe their value has stayed the same. Only 23% believe their home has lost value.

“This survey reveals that despite the data to the contrary, people either aren’t paying attention to their housing market or are in denial about their own home’s value,” said Stan Humphries, Zillow.com vice president of data & analytics.

Zillow’s own estimates are that home values declined 5% on average last year, with many markets posting much steeper declines.

Humphries said that even in markets where new homeowners owe more on their mortgage than their house is worth, “most people are not really affected by declining values unless they absolutely must sell or need to immediately refinance or withdraw equity.”

Figures from the National Association of Realtors show that the median price of an existing home sold in 2007 fell 1.4% from 2006, the first decline in that key price measure the trade group has ever recorded. The Realtors released an economic outlook Thursday that forecast another 1.2% decline in prices in 2008.

And those price readings under represent declines in the nation’s weakest markets, which have taken a big hit to sales volume.

The S&P Case/Shiller, a closely watched index that tracks home values of all homes in the nation’s largest markets, not just those that are sold, showed about an 8% drop in home values in November compared to a year earlier, the worst on record.

Hugh Moore, a principal at Guerite Advisors, a research and financial advisory firm, said he wasn’t surprised by the denial demonstrated in the survey results. He said research into previous housing busts shows homeowners are slow to accept that their home has lost value.

“It’s a visceral reaction; you lock into the highest price you ever heard, and you’re going to hang onto it,” Moore said. “It’s a grieving process. First you go through denial and disbelief. Acceptance is the last step you get to.”

Moore said it’s important to remember that only a small fraction of homeowners try to sell their home in any given year, and unless they are trying to get new financing or a home equity line of credit, there’s no reason most will be confronted with the decline.

But he said the denial will make recovery from this current housing slump take longer and be more difficult because home sellers will be slow to adjust their asking price to the new market reality.

“Studies have shown stock markets have public markets that realign themselves rather quickly,” Moore said. “But housing busts affect the economy twice as much, because home ownership is so much more widespread, and they take twice as long to correct themselves.”

[Ex-SD]

When enough REO’s and homes where the sellers absolutely have to sell have closed at much lower prices (which will lower the comps for future sellers and buyers)……………..then reality will set in, just like rigor mortis on a dead body. These people who were surveyed obviously believe that wishing and praying for something will make it come true. People like this always amaze me because they refuse to find out the facts on a given subject and act accordingly without injecting emotion into their thinking.
The prognosis for these people: “There’s a lot of sadness in the world”

[Ex-SD]

When enough REO’s and homes where the sellers absolutely have to sell have closed at much lower prices (which will lower the comps for future sellers and buyers)……………..then reality will set in, just like rigor mortis on a dead body. These people who were surveyed obviously believe that wishing and praying for something will make it come true. People like this always amaze me because they refuse to find out the facts on a given subject and act accordingly without injecting emotion into their thinking.
The prognosis for these people: “There’s a lot of sadness in the world”

[Ex-SD]

When enough REO’s and homes where the sellers absolutely have to sell have closed at much lower prices (which will lower the comps for future sellers and buyers)……………..then reality will set in, just like rigor mortis on a dead body. These people who were surveyed obviously believe that wishing and praying for something will make it come true. People like this always amaze me because they refuse to find out the facts on a given subject and act accordingly without injecting emotion into their thinking.
The prognosis for these people: “There’s a lot of sadness in the world”

[Ex-SD]

When enough REO’s and homes where the sellers absolutely have to sell have closed at much lower prices (which will lower the comps for future sellers and buyers)……………..then reality will set in, just like rigor mortis on a dead body. These people who were surveyed obviously believe that wishing and praying for something will make it come true. People like this always amaze me because they refuse to find out the facts on a given subject and act accordingly without injecting emotion into their thinking.
The prognosis for these people: “There’s a lot of sadness in the world”

[Ex-SD]

When enough REO’s and homes where the sellers absolutely have to sell have closed at much lower prices (which will lower the comps for future sellers and buyers)……………..then reality will set in, just like rigor mortis on a dead body. These people who were surveyed obviously believe that wishing and praying for something will make it come true. People like this always amaze me because they refuse to find out the facts on a given subject and act accordingly without injecting emotion into their thinking.
The prognosis for these people: “There’s a lot of sadness in the world”

[patientlywaiting]

I agree 100% with you, ex sd. Generally for those same people, their stuff is “special” and thus move valuable. They’ll be in denial until the very end. Definitely “a lot of sadness in the world.”

[patientlywaiting]

I agree 100% with you, ex sd. Generally for those same people, their stuff is “special” and thus move valuable. They’ll be in denial until the very end. Definitely “a lot of sadness in the world.”

[patientlywaiting]

I agree 100% with you, ex sd. Generally for those same people, their stuff is “special” and thus move valuable. They’ll be in denial until the very end. Definitely “a lot of sadness in the world.”

[patientlywaiting]

I agree 100% with you, ex sd. Generally for those same people, their stuff is “special” and thus move valuable. They’ll be in denial until the very end. Definitely “a lot of sadness in the world.”

[patientlywaiting]

I agree 100% with you, ex sd. Generally for those same people, their stuff is “special” and thus move valuable. They’ll be in denial until the very end. Definitely “a lot of sadness in the world.”

[bob007]

the survey was nationwide. In Indianapolis, Dallas and Memphis prices are flat even with a few foreclosures.

[bob007]

the survey was nationwide. In Indianapolis, Dallas and Memphis prices are flat even with a few foreclosures.

[bob007]

the survey was nationwide. In Indianapolis, Dallas and Memphis prices are flat even with a few foreclosures.

[bob007]

the survey was nationwide. In Indianapolis, Dallas and Memphis prices are flat even with a few foreclosures.

[Author]

Posts