Quarterly Homeowner Confidence Report Shows Levels Vary Across The Country

By
Services for Real Estate Pros with Zillow

Each quarter Zillow tracks Homeowner Confidence by conducting a survey, along with Harris Interactive, to gage homeowner sentiment about the value of their home.  When we started 6 quarters ago, perception and reality were quite far apart.  But each quarter homeowners have come closer and closer to realizing that values have dropped nationwide, and the spread has narrowed. 

However in Q3 of 2009, perception and real estate markets were literally all over the map.  People in the Northeast were overly cynical about home values, while those on the West coast were overly optimistic. 

From a national standpoint, when asked about their own home's value over the past year:

  • 25% think their home's value has increased
  • 26% think their home's value has stayed the same
  • 49% think their home's value has decreased

In reality, 72 % of U.S. homes lost value over the past year, and 22% of homes increased in value. That's fewer homes declining versus Q2(83%), and a smaller Misperception Index of 10 (vs. 13 in Q2 and 17 in Q3 2008).  A Misperception Index of zero would mean homeowners' perceptions were in line with actual values.

Here's a breakdown of homeowner perception vs. reality nationwide:

So what does the general public think about the future of their real estate market?  The vast majority of homeowners - 84% - believes their home has reached a bottom and will not decline any further. Specifically:

  • 41% think their home's value will increase in the next six months
  • 43% think their home's value will stay the same
  • 17% of homeowners think their home's value will decrease

There is a lot going on with housing right now, both organically in-market and with government stimulus, so it is hard to predict with any certainty what the future holds. 

As Zillow's Amy Bohutinsky, Zillow VP of Communications put it - "Overly optimistic homeowners?  Probably.  Confused homeowners?  Absolutely.  And I don't blame them one bit."  This is why it is so important people have professional representation to help interpret what is happening locally and maybe, to certain degree, even help look forward. 

Curious about home value trends in your neighborhood, please visit Zillow's new and improve Local Info tab to see dynamic home value charts and neighborhood make up stats.

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Maureen McCabe 11/29/2009 10:09 PM
  2. Patty Mortara REALTOR CRS | Hunterdon County (NJ) 11/30/2009 02:07 AM
  3. Esko Kiuru 12/08/2009 08:56 AM
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Ambassador
837,155
Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

Interesting , we talk a bit about this , not these numbers, on the mountain real estate report this week. Wish I had seen this post first

Nov 25, 2009 07:27 AM #1
Rainer
70,510
James K Barath, CMPS
Canopy Mortgage, LLC - Merrillville, IN
FICO Pro, Certified Military Housing Specialist

Thanks for the facts. I really enjoyed the comments that Amy Bohutinsky made in regards to home owners mindset.

Nov 25, 2009 08:19 AM #2
Anonymous
Victor Lund

We love that you are working with Harris on this valuable consumer research.  It leverages the large audience of Zillow to gain excellent data.  There is no link to the harris poll in this post that I can find.  What was the methodology and size of the sample?

I compared your Market Reports to the Clarus Market Reports.  The data is significantly different.  I suspect that you are indexing off of zillow active and solds - whereas the Clarus reports index off MLS actives and solds.  Clarus looks at the 'county' and zillow looks at the 'metro' area.  The comparison does not work. 

Zillow shows the average home price in San Luis Obispo Metro average property value as $413,400 - the 6th most expensive market in the country.  Clarus shows San Luis Obispo County at $270,170.  The market is slightly up from $267,520 last month.  These are pretty big differences in data sets.

On the other hand, zillow shows the average market value of Santa Barbara Metro at $438,500.  Pretty close to Clarus at $423,330.

Whenever I look at data like this, I also think of the Shiller index.  Their inforamtion is very substandard, but they are considered the Gold Standard for what is going on in Real Estate.  It scares me that the Fed. Reserve is basing monitary policy off of that index.  I suspect that the zillow index is better - more data.  Clarus is probably even better - more data and more current data.

As always, great post Sara, and great work by zillow.  Have a wonderful thanksgiving.

Nov 26, 2009 12:56 AM #3
Rainmaker
1,431,110
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

I think we may have got hit first with the drop in prices in the west.  They are going up now.  I do not know if they will drop sharp again.  I no longer make predictions.

Nov 26, 2009 07:12 AM #4
Rainmaker
131,417
Mike Henderson
Your complete source for buying HUD homes - Littleton, CO
HUD Home Hub - 303-949-5848

Interesting data.  Not localized enough to help me though.

Nov 27, 2009 01:42 PM #5
Rainer
333,502
Frank Castaldini
Compass - San Francisco, CA
Realtor - Homes for Sale in San Francisco

I'm surprised the survey didn't include people who didn't know if their house went up or down in value.  Not everyone knows.  We have better understanding in the trenches and that's why people need to know a good realtor if they need to know the facts.

Nov 29, 2009 04:50 PM #6
Rainer
126,384
Tony Grego, 317-663-4173 #1 Trade Association for Alternative Inv
REISA - 317-663-4173 - Indianapolis, IN

Nice information. I always feel it is not what the numbers are it is what folks feel they are. 

Great post

Thanks and have a great day

Tony

Nov 29, 2009 09:32 PM #7
Rainmaker
182,040
Sara Bonert
Zillow - Atlanta, GA
Real Estate Internet Marketing

Victor- Thanks for the in-depth comment.  Here is a link to more on the methodology and sample size.

I am not familar with Clarus market reports to properly comment on them, I assume they are based on MLS data?  If that is the case, I can easily see why there would be discrepencies. 

Stats derived from MLS data is typically using homes that are currently on the market or those that recently sold.  Because Zillow has a database of about 90 million homes, we are able to look at ALL homes to generate such reports. 

The biggest reason I looking at ALL homes is that it removes any bias as to what is currently selling.  Say you are in a market where sales are made up mostly of first time buyers (as many markets are right now).  This typically means that lower priced homes for the market are the ones moving.  So when average sold price is calculated, there will be a bias towards these lower priced homes, making it look like the whole market is trending down whether this may or may not be the case.  My guess is the different data sets are causing the bigger differences you note in your comment. 

Again, I am not that familar with Clarus, so feel free to correct me.  Agreed about Case-Shiller!  

 

Nov 30, 2009 03:12 AM #8
Anonymous
Victor Lund

Sara, You can check out Clarus here.  Clarus is the marketing brand that the California Associaiton of REALTORS uses for Terradatum's products that they have licenced.  You are right, Terradatum offers a suite of broker and agent market analytic tools that key off MLS data as the source.

Anyway, as always - your consumer research on consumer attitudes is awesome.  There are only a few places that have enough visitors and listing data to survey consumer attitudes on a national scale (top 5 consumer real estate portals).

 

Nov 30, 2009 04:50 AM #9
Rainmaker
1,003,938
Corinne Guest
Corinne Guest, REALTOR® | Barrington Realty Company - Barrington, IL
Barrington Lifestyles

I am actually pleasantly surprised that 40% od owners acknowledged a decline. My personal zillow report gave me an increase in the last month, and this may be supported by the increase in sales in our area.

Nov 30, 2009 05:38 AM #10
Anonymous
bbrunophotography

Interesting, isn't it, how perception sometimes becomes truth? I love research, and your findings are fascinating. It's a confusing time for home buyers, and with so many stats coming at them daily on cable networks, local news, and online, it's no wonder they're waiting and watching before taking that important first step.

 

Nov 30, 2009 07:09 AM #11
Rainer
130,836
Andrew Martin
REMAX Accord - San Ramon, CA

Confused homeowners?  Absolutely.

I couldnt agree more with Amy Bohutinsky. Anyone that looks at Zillow is confused by the randomness of the information about home values.

Please let the public know that Zillow is for Entertainment Purposes only, and to call their Realtor to get a clear and accurate picture of their homes value.

 

Nov 30, 2009 10:15 AM #12
Rainmaker
8,069
Victor Lund
WAV Group - Arroyo Grande, CA
Partner, WAV Group

Andrew, if you focus on the insights that zillow is publishing about consumer trends, you will gain a lot of value from their research.

Their sales numbers include a variety of data sources beyond the MLS - for example, they reference a lot of foreclosure data in thier property records as well as some FSBO data.  In some ways they go beyond the research that agents have access to in many regional mls systems.

The most important thing to keep in mind is that consumers are gathering information from zillow and other online resources.  I think that it is excellent that you are staying tuned to that information so that you can articulate the differences in data sources and how that impacts them as buyers or sellers.

Zillow happens to have difficult time with Contra Costa county.  They have over 97% of the listings, but only zestimate the accuracy of the selling price within 5% of the actual selling price 26% of the time.  Most of your inventory there is over $1 million, which is usually where Automated Valuations fall off in accuracy.

Again - kodos to you for keeping track of all of this.  As you may know, Keller Williams sends all of thier listings to Zillow and number of other consumer website portals.  That is an important marketing tool that should be communicated to your sellers.

Nov 30, 2009 10:33 AM #13
Rainer
130,836
Andrew Martin
REMAX Accord - San Ramon, CA

Victor,

Thanks for your comments. But I would never use the word Zillow with any of my clients and I wish KW and all other real estate agents wouldn't support them either. And seriously, I don't look towards entertainment sites like zillow to get my consumer resaerch. What a joke.

"Zillow happens to have difficult time with Contra Costa county"  Your absolutely right. And I bet that true for 99% of the markets in the US

Dec 01, 2009 02:06 AM #14
Rainmaker
325,871
Esko Kiuru
Bethesda, MD

Sara,

It's good to read that most consumers see their home values stabilizing. That's a big step in this real estate market. The next step is to experience prices starting to move cautiously upward.

Dec 08, 2009 08:55 AM #16
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