Homeowners deep in denial over drop in housing value
Filed under: Health
Sure, 77% of U.S. homes have dropped in value during the past year, but not yours, right? Dream on. In fact, your dream is widely shared. Zillow.com's Homeowner Confidence Survey recently found that over six in ten homeowners were convinced their houses have remained stable or increased in value despite the housing bubble collapse.
The most Pollyanna-ish owners live in the South, where 48% felt their houses had increased in value, although only 26% actually did. Those in West were pessimistic, but not pessimistic enough; 56% think their house value had declined. The actual number is 88%.
According to Zillow, our modest home is now worth $285,500. The county auditor thinks our home is worth $279,500. (I'm pleased, as we paid $53,000 thirty years ago). The home across the street, though, comparable in size except for an addition we added ten years ago, recently sold for $180K, while the one next door to it went for $380,000. Which is a better barometer of our home's value?
Is it any wonder that homeowners are unwilling to consider a decline in their house value? This is not a standard product that one can comparison shop on PriceGrabber.com. The only time one can be absolutely sure is when the house is sold and the money is in hand.
However, if 77% of homes have declined in value, this might be a good time to ask your county auditor about a re-evaluation for tax purposes. Also, check with your insurance agent to make sure you aren't paying for more insurance than you need.
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Reader Comments (Page 1 of 1)
8-06-2008 @ 5:05PM
Bruce Wilhite said...
I'm one of those Pollyanna-ish Southerners who is just plain ol' ignorant when it comes to the value of his home. I don't really care. Why? I have nowhere else to go, nowhere I want to go, and no need to go there if I did. I'm content right where I am. Even if the house should go to zero, it's a nice rental (heck, I'm in hock to the bank anyway), and I'm already here. I don't have to pay for a moving truck. One day, I'll get the sucker paid off, and the only people looking for rent money then will be the property revenuers. So I hope to convince them that the house ain't worth nuthin'.
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8-06-2008 @ 5:59PM
j said...
I live in an area where BRAC is moving thousands of jobs to. The Govt is trying so hard to relocate people that they are paying them a large relocation fee to move to my area. And to make it better new housing is having trouble preparing for the demand- I see Zillow drop my house value and think what a joke. The comps for my home (a single family) are townhouses (something that the bank would only let you use in an extreme circumstance) and it uses homes in other neighborhoods (things like schools, amenities, etc effect your value My neighborhood has tennis courts, a gym and a few swimming pools- that homes they use a mile a way does not how does that compare). I've seen that my neighbor's house is valued more then mine - Why? His house is smaller- His land acerage is less- but he filled in his info to Zillow and now it shows up as more- still It's not correct he's listed his basement as living area. In a true appraisal you get value for a finished basement but not the same as the upper levels. Zillow doesn't acknowledge this. Zillow is a fun thing to look at but be realistic- if you want a real appraisal use an appraiser and make sure they know what's going on. I'd be a fool to use Zillow's value to sell my home or refinace off it.
My home may have gone up or down in value but no where near the wild swings that Zillow has reported- if I wanted to sell my house I know that I could get what it appraised for a year ago and close on it in about a month. Zillow would tell me otherwise.
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8-06-2008 @ 9:12PM
Bill Simons said...
This helps me figure out the housing portion of my woes, but I'm admittedly a bit freaked out right now by the state of the economy. As I approach retirement, I'm trying to soak in as much financial knowledge as possible (should have been doing more of this earlier, I know – not that I'm clueless either, but just that things are moving in multiple directions so fast). I've been reading like mad, and I figure you all might be interested in more direct financial advice like here at WalletPop. So here's another blog I've found useful: http://blog.investtalk.com
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