PrintDespite the fact that nearly one out of four American homeowners owe more on their homes than their mortgages are worth, more than one quarter of American homes actually increased in value last year, according to Fourth Quarter Real Estate Market Reports from Zillow, the online real estate marketplace with data on millions of U.S. homes.
Whether they lost or gained value, homeowners’ perceptions of their homes’ value came closer to reality than they have in seven quarters, according to a Zillow-sponsored survey. Half of homeowners believe their own homes lost value during 2009, while 30 percent believed their homes’ values stayed the same. In reality, 65 percent of homes lost value during the year, and values remained the same for 7 percent.
“Homeowners are finally succumbing to the notion that, in most areas, declining home values over the past year are no longer the exception, they are the rule,” said Dr. Stan Humphries, Zillow chief economist.
“Almost three times as many people believe their home’s value will increase over the next six months as believe it will decrease in value, a level of optimism that is likely to outpace actual performance in the near-term. Given recent news about the stabilization of home values in some markets, I can see why homeowners are so optimistic. However, home values in many markets are still under substantial downward pressure from high levels of foreclosures and we don’t believe we’ll see a definitive bottom nationally until the second quarter of this year. We’re not out of the woods yet.”
Forty-two percent of homes in the Midwest increased in value last year, more than any other region. In the West, an area hit hardest by foreclosures, only 21 percent of homes increased in value.
According to the National Association of Realtors, the national median price for all housing types rose 1.5 percent last year. It was the first year-over-year gain in median price since August 2007.
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