A River in Egypt

by Coco Clayman Cook

Denial is a powerful thing.  While I am a huge fan of positive thinking there is also a need to be realistic.  Zillow.com, a website specializing in real estate news, recently conducted a survey among home owners.  Almost half of the home owners surveyed believed that their home value had either remained the same or had increased in the last year.  The reality is that 74% of the homes in United States have decreased in the last year.

Despite the fact the news bombards the public with daily reports of dropping market values, it seems that many people still believe that this is a phenomena happening to someone else in another neighborhood.

My theory is that people view the value of their home the same way most people view their retirement fund.  It is a long term investment that will fluctuate in value from time to time but over an extended period of time it will increase in value.  Rather than monitor the fluctuations, people only think about the actual market value when they need to convert the value to cash.