Friday, August 22, 2008

Zillow Says Homeowners In Denial

  • 77% of the homes in the nation have decreased in value during the 2nd quarter of 2008

  • 62% of homeowners believe their home has increased in value

Source: Zillow's new survey

Why the disconnect? It's a variant of the NiMBY phenomenon ("Not in My Back Yard"). Survey 1000 homeowners about whether we should build a new landfill, create some more low income housing, or build another nuclear reactor or oil refinery to reduce our dependence on foreign oil. The answer you'll  hear from most of those folks is "Sure, we need that," followed by a quick "but don't build it near my home."

It's the same with home values. We all hear the media stories about declining home prices. But every time I go on a listing appointment, the sellers are disappointed, shocked and angry when I start recommending a listing price based on the recent sold prices.

I'm in denial myself. I refuse to believe that my beautiful, upgraded condo with gorgeous wood flooring and a stunning mountain view and all those other little extras.... I refuse to believe that my home is only worth $160,000 now when it was worth $180,000 last winter, $200,000 a year ago and $220,000 eighteen months ago.

Here's the key: My condo is not for sale. I don't plan on putting it up for sale. So I can happily stay in denial for as long as I like. Until and unless a home is listed for sale, it doesn't really matter what the homeowner thinks it's worth.

Homeowners, I say be in denial about how much or how little your house is worth. Just don't be for sale at the same time.