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Homeowners' perception gap

August 10, 2008|Annette Haddad

The majority of Americans think the nation's housing crisis is something that happens to the other guy.

That's according to a survey of more than 1,300 homeowners conducted by Zillow. Two-thirds of homeowners believe their house has increased in value or remained the same in the last year. Yet these same folks acknowledge the existence of foreclosures in their neighborhoods and believe that more are on the way.

"We attribute this gap to a combination of inattention and a fair bit of denial that causes people to believe their home is insulated from the woes of the market that affect others but not them," says Stan Humphries, Zillow's chief of data and analytics.

Zillow, of course, is the website founded by the brains behind Expedia that came on strong more than two years ago with its clever algorithms that assign a "value" to nearly every house in America. Initially, the site was a bit disappointing because, at least in many parts of Southern California, its estimates seemed wildly off the mark.

Since then, reality has caught up with Zillow. The company's data now appear to be in line with most other research that shows the vast majority of U.S. houses lost value in the last 12 months.

One of the more interesting findings of Zillow's latest survey shows that homeowners in the West seem to have a slightly better grip on the housing reality. More than half -- 56% believe their home value had indeed declined in the last year, versus 38% of homeowners overall.

Maybe that's because homeowners here are facing a harsher reality. After years of tremendous price appreciation, the stinging face-slap of rapidly depreciating values has brought some homeowners to their senses.

-- Annette Haddad

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