Press Releases

Homeowner Confidence Shrinks to Lowest Level on Record; Homeowner Perception of Home Values Nearly Equal to Reality

Northeastern and Western Homeowners Overly Cynical About the Value of Their Own Homes, According to the Zillow® Q4 Homeowner Confidence Survey

Feb 18, 2010

SEATTLE, Feb. 18 /PRNewswire/ -- American homeowners'(i) confidence in their own homes' values during the fourth quarter fell to the lowest level in seven quarters, with just one in five (20 percent) believing their own homes' values increased during 2009, according to the Zillow Q4 Homeowner Confidence Survey(ii). In reality, 28 percent of homes increased in value during the year, according to Zillow's Fourth Quarter Real Estate Market Reports.


That resulted in a Zillow Home Value Misperception Index(iii) of negative two – the closest to zero on record since Zillow introduced the index in the second quarter of 2008, when the index was at 32. A Misperception Index of zero would mean homeowners perceptions' were in line with actual values. A negative Misperception Index indicates that homeowners are overly cynical about their own homes' values when compared with reality. This is the first time the national index was negative.

Half of homeowners believe their own homes lost value during 2009, while 30 percent believed their homes' values stayed the same. In reality, 65 percent of homes lost value during the year, and values remained the same for 7 percent.

"Not My Home" Sentiment Fades as Homeowner Attitudes Shift

The results demonstrate the "not my home" sentiment that was once prominent among American homeowners has faded.  One year ago, nearly half (47 percent) of homeowners believed values in their local market would decrease in the next six months. However, when asked about their own home, fewer than one in three (30 percent) believed their own home's value would decrease.  

Now that gap has shrunk, with 22 percent of homeowners believing their local market will lose value over the next six months and 14 percent believing their own home will lose value.

"Homeowners are finally succumbing to the notion that, in most areas, declining home values over the past year are no longer the exception, they are the rule," said Dr. Stan Humphries, Zillow chief economist. "Almost three times as many people believe their home's value will increase over the next six months as believe it will decrease in value, a level of optimism that is likely to outpace actual performance in the near-term.  Given recent news about the stabilization of home values in some markets, I can see why homeowners are so optimistic.  However, home values in many markets are still under substantial downward pressure from high levels of foreclosures and we don't believe we'll see a definitive bottom nationally until the second quarter of this year.  We're not out of the woods yet."

Homeowner Perception by Region

    Homeowner Perception 
     of Home Value Change 
     in Past Year by        US Q4
     Region                  2009     Northeast   Midwest    South   West
    --------------------    -----     ---------   -------    -----   ----
    My Home's Value Has
     Decreased                50%         46%        46%     49%      62%
    -------------------       ---         ---        ---     ---      ---
    My Home's Value Has
     Stayed the Same          30%         32%        31%     30%      26%
    -------------------       ---         ---        ---     ---      ---
    My Home's Value Has
     Increased                20%         22%        23%     21%      13%
    -------------------       ---         ---        ---     ---      ---
    Market Reality: Homes Reporting Year-over-Year Value Changes in Q4,
     according to Zillow
    Actual Percent of Homes 
     that Decreased                          65%  49%  64%  64%  73%
    --------------------------------------   ---  ---  ---  ---  ---
    Actual Percent of Homes that Stayed the
     Same (+/-1%)                             7%   9%   7%   7%   6%
    ---------------------------------------  ---  ---  ---  ---  ---
    Actual Percent of Homes that Increased   28%  42%  29%  29%  21%
    --------------------------------------   ---  ---  ---  ---  ---
    Q4 2009 Home Value Misperception Index   -2  -14    3    0   -5
    --------------------------------------   ---  ---  ---  ---  ---
    Q3 2009 Home Value Misperception Index   10   -6    8   15   17
    --------------------------------------   ---  ---  ---  ---  ---
    Q4 2008 Home Value Misperception Index   10    3    5   14   13
    --------------------------------------   ---  ---  ---  ---  ---
    Homeowner Perception of Own Home's Value in Next Six Months
    My Home's Value Will Decrease       14%  16%  11%  13%  20%
    -----------------------------      ---  ---  ---  ---  ---
    My Home's Value Will Stay the Same  47%  46%  51%  49%  42%
    ---------------------------------- ---  ---  ---  ---  ---
    My Home's Value Will Increase       38%  39%  38%  38%  38%
    -----------------------------      ---  ---  ---  ---  ---

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

Northeasterners and Westerners Most Cynical About Own Homes' Values:

Homeowners in the Northeast and West are overly cynical about the value of their home. Three-quarters (78 percent) of Northeastern homeowners said their home lost value or stayed the same in the past year when just over half (58 percent) of the homes actually did. This disparity between perception and reality resulted in a Misperception Index of -14, making Northeasterners the least aligned with reality. Western homeowners, who last quarter were the most optimistic and the least aligned with reality, did an about-face in the fourth quarter. They now are slightly cynical with a Misperception Index of -5.

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, renters, real estate agents and mortgage professionals find and share vital information about homes and mortgages. Launched in early 2006 with Zestimate® home values  and data on millions of U.S. homes, Zillow has since added homes for sale and homes for rent, 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 homes and real estate in every stage of their lives -- home buying, selling, renting, remodeling and financing.  The company is headquartered in Seattle and has raised $87 million in funding.

About Harris Interactive

Harris Interactive is one of the world's leading custom market research firms, leveraging research, technology, and business acumen to transform relevant insight into actionable foresight. Known widely for the Harris Poll and for pioneering innovative research methodologies, Harris offers expertise in a wide range of industries including healthcare, technology, public affairs, energy, telecommunications, financial services, insurance, media, retail, restaurant, and consumer package goods. Serving clients in over 215 countries and territories through our North American, European, and Asian offices and a network of independent market research firms, Harris specializes in delivering research solutions that help us – and our clients – stay ahead of what's next. For more information, please visit and Zillow are registered trademarks of Zillow, Inc.  Harris Interactive is a registered trademark of Harris Interactive Inc.

(i) 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.

(ii) The survey was conducted online by Harris Interactive within the United States on behalf of between January 8 and January 12, 2010 among 2,215 adults ages 18+, of whom 1,296 are homeowners. 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.

(iii) 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 (29% adjusted, from survey) and the percent of U.S. homes that actually increased (30% adjusted, Zillow Q4 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 Q4 data is based on analysis of Q4 Real Estate Market Reports.