Regional property price inconsistencies are discouraging transaction closings, creating an atmosphere of uncertainty and contributing to disparities between homeowner expectations and actual performance. Despite the dismal prospects for employment and foreclosures, homeowners remain blithely confident of appreciating home values. For more on this, see the following article from Property Wire.
House price confusion is clouding confidence in the real estate market in the US, according to a new survey.
The fact that property prices are fluctuating from region to region means the investors and buyers are not keen to close on sales as one area sees stable prices while another continues to decline, says the third quarter home owner survey from Zillow.
Property owners in the Northeast were the most cynical about their own homes’ values over the past 12 months, although the region posted the highest percentage of homes increasing in value during that same time period, the survey shows.
Some 20% of Northeastern homeowners believed their own home gained value in the past 12 months, according to the survey. But in reality, 31% percent of homes in the region increased in value.
It is the first time since the survey began that homeowners have believed values performed worse than they did in reality.
Owners in the West were the least realistic in the country, with 28% believing their own property values increased in the last year. But just 17% of homes in the region actually increased.
Nationally, 25% believed their own home’s value increased in the last 12 months but in reality, only 22% of US homes gained value.
But fewer than half, some 49%, thought that home’s value decreased while 72% actually decreased.
The survey shows that property owners are more optimistic about the future than at any time in the past six quarters.
Two in five, some 41% say their own home’s value will increase in the next six months while 43% say it will remain the same, with only 17% saying it will decrease.
‘Home owners are clearly confused about the housing market, and with good reason. Property values in different parts of the country have shown varied performance in the third quarter,’ said Zillow Chief Economist Stan Humphries.
‘In the Northeast, they have shown significant stabilization. In the Boston metro area, values are even up from this time last year.
But across the rest of the country, home owners are holding onto the hope that home values have performed better than they have in reality.
Consistent with all previous surveys, homeowners also seem to be overly optimistic about future home values,’ he added.
Meanwhile, the latest figures from the Mortgage Bankers Association show that 14% of all American mortgages are either delinquent or in the process of foreclosure and the outlook will get worse before it gets better.
Unemployment is driving up delinquencies and foreclosures to record levels and the real estate picture will not improve until it declines, according to Jay Brinkmann, MBA’s Chief Economist.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.