Americans are worried about the economy and believe that a recession is looming, but their faith in real estate remains fierce, according to a Los Angeles Times/Bloomberg poll.
Nearly a third of those polled predicted home values in their neighborhood would increase in the next six months. Only 16% anticipated a decrease. The rest said values would hold steady.
Call it foolish faith or bold optimism, the forecast is at odds with the downward trend of home prices.
The National Assn. of Realtors recently reported that prices fell 2.7% in the last three months of 2006. Many economists expect real estate to have a rough ride this year, partly because of rising mortgage loan defaults.
Scott Richard Wallace, a San Diego carpenter, doesn't share that view. "Housing is always a good investment," he said in an interview after the poll. "I don't see it ever losing."
Real estate aside, however, the poll of 1,373 adults reflected widespread unease about the U.S. economy.
Most experts, including Federal Reserve Chairman Ben S. Bernanke, say there's little chance of a recession.
Americans have a much bleaker outlook. Sixty percent of the poll respondents said a recession was somewhat or very likely within the next year.
Two-thirds said they thought the country was "seriously off on the wrong track." This is down from 70% in a similar poll last month but otherwise the highest in 12 years.
"I see prices keep going up -- gas, produce, groceries, heating oil, electricity," said Martha Flynn, who lives in Chicago. "People are struggling."
Flynn, 47, said she had last been employed by a bank but hadn't worked in two years. "I don't think there's going to be a middle class anymore," she said. "You're either in poverty or upper middle class."
Economists say such sentiments often foreshadow trouble to come.
"Turning points are hard to catch," said Jared Bernstein of the liberal Economic Policy Institute. "A lot of time, people on the ground feel the economy's weakness before officials see the signals and declare a recession."
The last time the recession question was asked in a Times poll, in December 2000, 64% of respondents said a downturn was likely. Three months later, a recession began.
Officially, the economy is slowing but remains in reasonable health. The unemployment rate in March matched its lowest level in six years. Hourly wages are finally outpacing inflation. The stock market, always a barometer of mood, is buoyant.
But fewer people seem to feel it.
Thirty-five percent of the respondents said their personal finances were "shaky," up from 30% in March and 28% in January.
In January 2006, 38% of Times/Bloomberg Poll respondents used that adjective. With that exception, the current level of unease is the highest in Times polls since the bleak early 1990s.
At the lower end of the income scale -- those in households earning less than $40,000 a year -- 54% said they weren't feeling financially secure.
When broken down by race, worries were greatest among blacks, more than two-thirds of whom rated their finances as "fairly shaky" or "very shaky."
Anxiety might be widespread, but it is by no means universal. Even as economists' predictions about the housing market have darkened over the last five months, people's expectations have brightened.
In December's Times/Bloomberg poll, 26% predicted the value of houses in their neighborhoods would go up over the next six months. In January, 27% did.
In the new poll, which was conducted April 5 through Monday and has a margin of sampling error of plus or minus 3 percentage points, 32% expect an increase.
Stan Smith, a retired minister in Eagle Rock, believes that borrowers have become overextended. He thinks the housing market will collapse. Eventually.
"The values are so inflated. It's ridiculous," said Smith, a renter. "But people are willing to pay the prices to live in certain areas. They want what they want, and they want it now."
Housing experts were a little puzzled by the enthusiastic attitude of some respondents.
"Mortgage credit is clearly tightening, affordability is not good and there are a record number of unoccupied homes for sale," said Scott Simon, a mortgage-bond fund manager for Pacific Investment Management Co. in Newport Beach. "We think prices should be down a few percent this year and, if we are wrong, it will be worse than that."
The poll respondents narrowly favored government aid for low-income buyers facing foreclosure, 50% to 41%. Black respondents were strongly in favor, 85% to 12%. The rising tide of foreclosure is expected to hit African Americans especially hard, and civil rights leaders have urged government intervention.
David Poulnot, an insurance agent in Charleston, S.C., is not an advocate of aid. Many people may be just one misfortune from disaster, he said, but what they really need is more discipline.
"TV and magazines make the good life look wonderful," said Poulnot, 49. "If you didn't get raised properly, it's easy to fall prey to wanting more than you can afford."