Press Releases

Homeowner Confidence Shrinks; Most Americans Now Believe Their Home's Value Has Declined

May 14, 2009

However, Three Out of Four Homeowners Think a Bottom Has Been Reached and Are Optimistic About the Future, According to Zillow® Q1 Homeowner Confidence Survey


SEATTLE, May 14 /PRNewswire/ -- American homeowners have a solid understanding of what has happened to the values of their own homes over the past year. A majority (60 percent) believe their own home lost value during the past 12 months, according to the Zillow Q1 Homeowner Confidence Survey(1). In reality, 80 percent of homes across the country lost value during the past 12 months, according to Zillow's first quarter Real Estate Market Reports.




Additionally, 18 percent believe their own home gained value in the past 12 months, and 22 percent believe its value remained the same. That resulted in a Zillow Home Value Misperception Index(2) of five - the lowest it has been since Zillow introduced the index in the second quarter of 2008 - and down from 10 in the fourth quarter of 2008. A Misperception Index of zero would mean homeowners perceptions' were in line with actual values.


More accurate perceptions of the past gave way to hope for the future. Most homeowners - 74 percent - believe their home will not decline in value in the coming six months, effectively calling a bottom to their own home's housing slide. Specifically, one in four homeowners (27 percent) think their home's value will increase in the next six months, while nearly half (47 percent) believe their home's value will remain the same. Homeowners were similarly optimistic when it came to predicting home values in their local markets. About two-thirds of homeowners believe home values in their local markets will increase (26 percent) or stay the same (37 percent) over the next six months. Thirty-seven percent believe home values will decrease.


As for selling activity, it's clear a significant number of potential sellers are holding back due to the current market. When asked about future plans to sell, 31 percent of homeowners said they would be at least "somewhat likely" to put their homes on the market in the next 12 months if they saw signs of a real estate market turnaround(3).


"The perception of American homeowners is finally catching up to reality, which is that 80 percent of all homes in the country lost value during this past year," said Dr. Stan Humphries, Zillow's vice president of data and analytics. "While homeowners are now more realistic when looking backward, they are still pretty starry-eyed when looking forward with three out of four homeowners believing that their own homes' prices will increase or be flat over the next six months. Unfortunately, there are few markets we expect to perform this well."


Humphries continued, "Also interesting is the information we have for the first time this quarter on the levels of 'shadow inventory' - homes that people would like to sell but that aren't currently on the market, and thus aren't captured in the official number of homes on the market. With almost a third of homeowners poised to jump into the market at the first sign of stabilization, this could create a steady stream of new inventory adding to already record-high inventory levels, thus keeping downward pressure on home prices."


Homeowner Perception by Region


    Homeowner Perception of Home Value  US Q1
      Change in Past Year by Region     2009  Northeast  Midwest  South  West

    My Home's Value Has Decreased        60%     57%       66%     49%    75%
    My Home's Value Has Stayed the Same  22%     20%       19%     29%    15%
    My Home's Value Has Increased        18%     23%       15%     22%    10%
    Market Reality: Homes Reporting Year-over-Year Value Changes in Q1,
     according to Zillow
    Actual Percent of Homes that
     Decreased                           80%     79%       80%     74%    89%
    Actual Percent of Homes that
     Stayed the Same (+/-1%)              3%      4%        4%      3%     2%
    Actual Percent of Homes that
     Increased                           17%     17%       16%     23%     9%
    Q1 2009 Home Value Misperception
     Index                                5      11         2       7      2
    Q4 2008 Home Value Misperception
     Index                               10       3         5      14     13
    Q3 2008 Home Value Misperception
     Index                               16      20        15      13     13
    Homeowner Perception of Own Home's Value in Next Six Months
    My Home's Value Will Decrease        26%     23%       32%     26%    25%
    My Home's Value Will Stay the Same   47%     45%       42%     50%    48%
    My Home's Value Will Increase        27%     32%       26%     24%    27%

    (NOTE: Column percentages may not total 100 percent due to rounding)


Western Homeowners' Perceptions Catch Up With Reality

With a Misperception Index of two - down from 13 in the fourth quarter - the perception of homeowners in the West was closest to reality, along with that of homeowners in the Midwest. Northeastern homeowners' perception of their own homes' values were the farthest from reality, with a Misperception Index of 11, up from 3 in the fourth quarter.


For full survey results or more information, please visit the Zillow press room at, or email


About® is an online real estate marketplace where homeowners, buyers, sellers, real estate agents and mortgage professionals find and share vital information about homes and mortgages, for free. Launched in early 2006 with Zestimate® home values and data on millions of U.S. homes, Zillow has since added homes for sale, a directory of real estate and lending professionals, Zillow Advice and Zillow Mortgage Marketplace. One of the most-visited U.S. real estate Web sites, with more than eight million unique visitors per month, Zillow's goal is to help people become smarter about real estate in every stage of the home ownership process--home buying, selling, remodeling and financing. The company is headquartered in Seattle and has raised $87 million in funding.


About Harris Interactive

Harris Interactive is a global leader in custom market research. With a long and rich history in multimodal research that is powered by our science and technology, we assist clients in achieving business results. Harris Interactive serves clients globally through our North American, European and Asian offices and a network of independent market research firms. For more information, please visit, Zillow and Zestimate, and are registered trademarks of Zillow, Inc. Harris Interactive is a registered trademark of Harris Interactive Inc.


    (1) The survey was conducted online by Harris Interactive within the
        United States on behalf of between April 6 and April 8,
        2009 among 2,123 adults ages 18+, of whom 1,357 are homeowners. Unless
        otherwise indicated, all percentages are based out of homeowners who
        think the value of their home has increased, decreased or remained the
        same since this time last year. Percentages have been recalculated to
        exclude "not sure" or "don't know" and/or not applicable responses,
        and to exclude homeowners who already had their home for sale. This
        online survey is not based on a probability sample and therefore no
        estimates of theoretical sampling error can be calculated. A full
        methodology, including weighting variables, is available.
    (2) Zillow Home Value Misperception Index measures the gap between
        homeowner perception of changes in their home's value, and actual home
        value changes.  The Misperception Index is calculated from an adjusted
        base of homeowners who think their home value changed - increased or
        decreased - and excludes "not sure" AND "remained the same" responses.
        The Index is the difference between those who think their home's value
        increased (23% adjusted, from Survey) and the percent of U.S. homes
        that actually increased (17% adjusted, Zillow Q1 data) in value
        year-over-year on an adjusted base of home values that changed by more
        or less than one percent (excludes homes that remained the same within
        one percent).  Zillow Q1 data is based on analysis of Q1 Real Estate
        Market Reports.
    (3) The results for the question "If you saw signs of a real estate
        market turnaround in the next 12 months, how likely would you be to
        put your home up for sale?," were taken from a base of 1,266
        homeowners who said the value of their own home increased, decreased
        or remained the same in the past 12 months.

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