Real estate website Zillow released the results of a survey on homeowners’ perceptions last week. While we’re all aware of the difficulties facing the housing market these days, Zillow’s survey revealed some nuances that you should be aware of — especially if you’re thinking of buying a new house any time soon.
According to the survey, 62 percent of US homeowners believe that their home’s value has increased or stayed the same in the past year. That’s a phenomenal number, especially when you consider that 77 percent of US homes have declined in value in the last 12 months. Homeowners realize that house prices have dropped, but the majority of the same set of homeowners just don’t think it could happen to them.
This can cause some problems when these homeowners decide to sell. It seems like every seller thinks that they can get at least what they paid for their home — and they’re willing to hold out for it, at least for a little while. For buyers, it’s an added complication in the process. It’s not a good idea to be the first person to put in an offer these days.
There is also a problem for homeowners themselves: many are counting on their home value to help when they take out a second mortgage, home equity line of credit or refinance their mortgage in an effort to handle other financial issues. Zillow’s survey also showed that over half of homeowners are planning home improvements — ranging from minor projects like repainting to major projects like installing a new roof.
The same perceptional problem is reflected in where most homeowners think the market is going, as well. Zillow reports that 75 percent of homeowners expect their home’s value will increase or stablize in the next six months — but 42 percent think that home values in their area will decrease. It will happen to the neighbor’s house — not mine.
Whether or not you currently own a home, these numbers are worth considering. Plenty of people think that right now is a great time to buy a house, due to the lowered prices. But these same people seem to believe that there will be a fairly immediate rebound in the housing market.
If you’re shopping for a new home, it’s worth focusing on a long-term plan rather than thinking about the current low prices. You don’t want to wind up in that 62 percent of homeowners that really don’t know what’s going on with their home’s value (and don’t want to know). You want to make a solid financial decision and make a plan that will allow you to ride out the bumps in the housing market with minimal worries. That means doing some research before buying a house.
You don’t need to be a real estate expert, but it’s worth your while to learn some of the factors that contribute to a house’s value — including the fact that if there is a downward trend among housing prices in a certain neighborhood, it applies to all the houses in that area. Your home-to-be will not be an exception, unfortunately. But there are also other factors that contribute to the value of a home.
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