Improved property prices and a growth in the number of real estate sales has prompted a renewed optimism in the US with 81% believing that the value of their home will increase or at least not fall in the next six months.
Although more than half of those who took part in the Zillow second quarter 2009 Homeowner Confidence Survey believe the value of their property declined in that last year, there is still an overwhelming confidence. And some 29% said that they are likely to put their home on the market.
Overall they are now more realistic about the value of property than they were a year ago but it is real estate owners in the South that are the least realistic and those in the West who are most realistic, the survey also shows.
The survey indicates that many homeowners could be waiting on the sidelines to sell. When asked about future plans to sell, 29 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. But analysts warn this could create shadow inventory that could slow a recovery.
‘Hope springs eternal for the US homeowner. While their perceptions of past declines in their homes’ values have gotten more realistic over the past year, each quarter homeowners express the opinion that the worst is behind them,’ said Stan Humphries, Zillow chief economist.
But he explained that their perception is still more positive than actual real figures show. For example, although 60% of all homeowners believe their own home lost value over the past 12 months in reality 83% of homes declined in value.
‘Despite some signs of slowing depreciation in many markets in the second quarter, the height of the 2009 home-buying season , there are many market fundamentals that will challenge home prices in the short term including high for-sale inventory levels, foreclosures, negative equity, and price-to-rent ratios that still aren’t back to historical levels yet,’ added Humphries.