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August 19th, 2010
The Bailouts Didn't Work

U.S. homeowners were less confident about the value of their homes in the second quarter, with one-third believing home prices had not yet reached a bottom, real estate website Zillow.com said on Thursday.
Homeowners were more pessimistic about the short-term future of home values in their local market than they had been in the previous three quarters, according to the Zillow Second Quarter Homeowner Confidence Survey.

Nevertheless, a significant number of homeowners said they planned to put their home up for sale in the next six months if they saw signs of a real estate market turnaround.

38% believed they had already reached a bottom.

"After years of hearing news about the housing recession, homeowners really understand the realities of the market," Stan Humphries, Zillow's chief economist, said in an interview.

Nationally, 28% of homeowners said home values in their local real estate market would decrease in the next six months, up from 20% in the first quarter.

Homeowners also became slightly more pessimistic about the performance of their own homes' values in the past year.

"As these homeowners hear news of stabilization in home values, they put their homes on the market, driving up inventory and keeping a cap on home value appreciation," Humphries said.

This is part of the reason Ziller is forecasting an L-shaped recovery in which home values, once they hit bottom, would experience very low annualized appreciation for the next three to five years, he said. 

CNBC


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