Homeowners In Denial: Everyone's House Is Worth Less Except Yours

According to a new survey from Zillow.com, Americans are totally out of touch with reality when it comes to their homes. 62% of homeowners surveyed said they thought their homes had appreciated in value over the past year. In fact, only 19% of homes in the US increased in value, and 77% actually decreased in value. (5% stayed the same.)

Stan Humphries, Zillow’s vice president of data and analytics, said in a statement that the gap between what consumers believe their homes are worth and actual values is due to “a combination of inattention and a fair bit of denial that causes people to believe their home is insulated from the woes of the market that affect others, but not them.”

“Although many homeowners may believe the worst is over, we think this level of optimism is out of sync with actual market performance,” Dr. Humphries said.

The survey also found that more than 90 percent of homeowners report that foreclosures have occurred in their local market already.

Are you in denial about the value of your home?


Zillow Finds Homeowners Confident in Own Home Value
[Wall Street Journal Development Blog]
(Photo: Joy of the Mundane )

Comments

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  1. blitzcat says:

    Maybe that has to do with the over-inflated numbers they got from zillow.com. My house appreciated 20% in the last 12 months according to their site. Yeah right.

  2. timsgm1418 says:

    I think the best way to find out would be to get it appraised, why guess?
    Also in some areas housing has not gone down that much. I’ve watched a few “My house is worth What?” episodes and there seems to be quite a few people on there that also think their houses are worth more than they are, generally though it’s because they’ve updated specifically to their taste instead of neutrally

  3. Youthier says:

    I believe it… my husband’s friends half-assedly “finished” their basement so they figured they could get about $10,000 more than what they paid for it.

    Can you believe – it hasn’t sold after 14 months in the market and no price reduction.

    Overall though, our area hasn’t depreciated as much as most so while I’m sure my home value has gone down, I don’t think it’s as much as many of the other cities in my home state (MI).

  4. iMe2 says:

    To find the depreciation in your home the best things would be to look up the most recent transactions data closest to your home and compare these to similar transactions X amount of time ago. The county auditor has these records publicly available, sometimes through their website.

  5. fostina1 says:

    until i get a free appraisal that says its worth less, ill continue to believe its worth more tyvm.

  6. Zyzzyva100 says:

    Hmmm, Zillow’s estimate of my home is within a grand of what the bank appraised the house for when we bought it (slightly more than the sale price). Looking around my neighborhood it seems to be pretty close. I think where Zillow gets to be way off is in cities where real estate prices are ridiculously high. Here in Rochester housing is cheap and it seems to have pretty good estimates. What it gives for the 2 houses my parents own in Chicago, however, is laughable.

  7. fostina1 says:

    wow according to that my house is worth 30k more than what i paid lol.

  8. Canino says:

    I’ve been trying to convince the county tax assessor for several years in a row that my house is worth less.

  9. SkokieGuy says:

    And Zillow says my home went up .6% in the past year, despite the other homes in my zip code declining 12.1% during the same period.

  10. Gopher bond says:

    I keep my house listed all the time, for sale by owner about $100K more than I paid, firm, no negotiating. I figure for an extra $100K, if someone wants my house, I’ll move. You never know, sometimes eccentric rich people might need a place to stay.

  11. Gopher bond says:

    Holy Zhit, zillows has my house listed at approximately $100K more than I paid for it in 2004! I might need to change my listing price.

  12. Skiffer says:

    Housing market aside – you’d get similar results in any sort of subjective survey like this.

    Similar to how if you ask people whether they think they’re better looking / taller / smarter than average…>50% will say they’re above average.

  13. strathmeyer says:

    My landlord is trying to sell our $210k house (Which he bought for $190k in 200) for $480k, but we just think it’s because he’s insane.

  14. SkokieGuy says:

    @Skiffer: Similarly, I’ve read over and over that people will often give a poor approval rating for Congress. When asked to rate their own Congress persons, invariably the rating is far higher.

  15. selianth says:

    My neighbor is trying to sell his house for exactly the same price he paid for it new, at the peak in the summer of 2005. Ours is virtually identical in floor plan, upgrades, etc. (they have hardwood in the bedrooms and we don’t; we put in a sprinkler system and patio; I figure it comes out even.) I’ll be curious to see if he gets anywhere close to the listing price. I’m doubting it will. It’s been on the market for 7 weeks so far.

  16. Aladdyn says:

    @timsgm1418: In my experience the appraiser will alter the value of your house to whatever you or the bank requires.

  17. floraposte says:

    My area has been hit less than some, but that means fewer foreclosures, not continued appreciation. I’m seeing an increasing number of FSBOs with asking prices that simply won’t appraise out with a mortgage lender, and an increasing number of places that just hang on the market for months. I’m glad I’m not planning to sell anytime soon.

  18. I remember talking to some friends in 2005 and 2006. A friend in 2005 said, “Real Estate is the best investment. There’s no way it can go wrong. Home values around here are on the up and up.” It was too early to point out any warning signs, so I just let him enjoy his irrational exuberance.

    Different friend in 2006 happened to be selling her house at the market peak. She was telling me how buying it would be a great investment. I bluntly said that home values are inflated and likely to go down soon. Response: “Nobody is predicting that.”

    Man it hurts being right all (most) of the time.

    (Note: I’m not knocking investing in real estate. I’m just knocking foolishly investing in real estate.)

  19. SadSam says:

    Yes my house is worth more, Zillow says so. I actually don’t think Zillow is that far off on the zestimate.

  20. mythago says:

    @Michael Belisle: same here. Otherwise intelligent, rational people were explaining to me, like I was a moron, that this is CALIFORNIA and you know, there’s no more land and housing prices will always go up.

  21. TomCruisesTesticles says:

    People in denial? No way. Just like everyone thinks they are smarter than everyone else, drive better, are funnier, better looking, etc etc etc etc

  22. MayorBee says:

    In fact, only 19% of homes in the US increased in value, and 77% actually decreased in value. (5% stayed the same.)

    So you can’t trust the people to self-appraise their homes, and you can’t trust the appraisers to add up to 100%. I guess that’s just how it work’s ‘round these parts.

  23. TechnoDestructo says:

    My dad is like that, to some degree. He bought before prices shot up in this area (Northern AZ), Prices have come down about 20-25% from their peak, more for some of the McMansions that developers were rushing to get built.

    Still, he’s up 50% from what he paid for it, and he’ll probably stay around there. (There has been a lot of legitimate growth.)

  24. The_IT_Crone says:

    I definitely see it. Even foreclosed homes are going for about 25% more than they seem to be worth (in my area).

  25. azzy says:

    Looks like my neighborhood has declined around 10%, which is pretty much what I expected. As long as my home is worth more than I paid/owe, and I think it still is on both accounts.

    It’s really interesting how the older parts of my subdivision have a lot of recent sales and the newer ones don’t. I bought in 2004, these people all get 3 to 5-year arms?

    Thank god my lender convinced me 30-year fixed was the way to go.

  26. alfundo says:

    In fact, only 19% of homes in the US increased in value, and 77% actually decreased in value. (5% stayed the same.)

    hmmm, 101%

  27. Meggers says:

    We just bought our first home less than a month ago. In our area (small town in MD, within 20 minutes of D.C.) there are very few (4 in the last few months) foreclosures. Go 5 miles into another city and another county and nearly every home under 400K is a bank owned property or a short sale.

    I feel that we got a pretty good deal on our home but we also had great credit and we weren’t stuck trying to sell a home either.

    According to Zillow, our neighborhood is doing pretty well compared to others in our area.

  28. ArgusRun says:

    Commercial real estate is seeing the same exact thing. Property owners got used to extremely low cap rates and huge amounts of foreign capital. Last RE bust, we saw lost of great deals for smart developers. Now, not so many.

    We’re just now starting to see reality sink in. Cap rates have been slowly going up, with Walgreen NNN deals edging closer to a 7% cap.

  29. BrAff says:

    As someone who worked in the mortgage industry for a few years (and thankfully got out over a year ago now…), I find people’s view of the value of their home a hilarious subject.

  30. Meggers says:

    @selianth: I also noticed this when I was looking at homes. One place we looked at was a foreclosure with broken windows, graffiti on the walls, roof partially collapsing. We wanted to buy it, tear it down and use the land. But the Bank would not budge and refused to sell the home for less than 300K.

    We looked at that home in late January and it is still sitting on the MLS for 300K.

  31. Japheaux says:

    I think the best way is to try to sell it at the appriased value. I recently protested my real estate taxes and the appraisal district told me that if I try to sell it at the appraised value it ‘should’ sell within two months. Because I wanted out of the neighborhood, I used a self-generated web page and no realtor and sold my house on a deadend street for the exact appraisal price in about a week. Moreover, I had web inquiries from a thousand miles away and I did no advertising at all except for the sign in the yard. Realtors told me I was stupid, but my neighbors can’t sell their house for $15/sq. foot less than what I sold mine for. Bottom line: it’s a case by case basis. Two very similar houses next door to each other–same builder, almost the same floor plan, one sells, one doesn’t. Never listen completely to experts…there is always someone somewhere who will buy it. I think it’s like collectibles…it’s only worth what someone will pay for it–no matter what the neighbors house is worth.

  32. strife1012 says:

    Well that site States I have made 45k on my house this year. I only bought it back in November. So much for a meltdown.

  33. goodpete says:

    Zillow says my condo is worth $400 less than I paid for it about a year ago (at the peak of the housing bubble). I guess I’m in denial because I thought my house stayed pretty stable in value…

    Also, similar condos (minus the hardwood and ceramic tile floors, stainless steel (<7 year old) appliances, in-wall ethernet and speaker wiring) are going for about the same as what I paid… So I’m going to guess Zillow is a little low… But maybe that’s just my denial speaking.

    Anyway, I’ve only been there a year, I’m not moving anytime real soon. Why should I care what my house may be worth if I were to be dumb enough to sell it in the middle of a housing recession?

  34. Meggers says:

    @Braff: Any good stories?

  35. SigmundTheSeaMonster says:

    Zillow’s information is WAY off base. My neighborhood consists of townhomes (updated “carraigehomes”) and most of Zillow’s information classifies many of the unit as having the same features, rooms, sq ft, baths, basements…
    They are wrong, and ask you to “claim” your home (register…) and correct it for them (thus increasing their income of advertising and accuracy).

    Going by latest MLS, my property assessment(s) from previous refinance or HELOC or equity appraisal, I’ve found their numbers incorrect. In fact, the location I live at, my property (as well as my neighbors) have appreciated average of 10% a year for last 10 years.

    The problem I face is when to stop upgrades/remodel when the value appreciation limits the return on investment.
    (some units never-updated sold for not much less than those move-in upgraded models)

  36. Sudonum says:

    Well Zillow estimates my mothers house, which we just sold, was worth around $50k less than it sold and appraised for, $699k vs $750k. The house is in SoCal and what we got for it was around the same as what it appraised for in 2006.

  37. Jevia says:

    Zillow has my house for about $3,000 less than what I paid a year ago, which I suppose isn’t that bad, given that I plan to stick around for a while.

  38. Ninjanice says:

    Ha! My condo is apparently worth $30k more than what my neighbors are listing their condos at! Suckers!

  39. taz20075 says:

    According to zillow…. I’m down about 50k on the house, the area has depreciated 6% (but my house has depreciated 16%).

    Meh…It wasa 30 year house anyway. I’ll start worrying in 2025.

  40. Dobernala says:

    Ben, I don’t know why you are disabling comments on the site redesign story (don’t want user input?), but I find the icons at the top to be very annoying. I’d like a way to turn those off.

    My $0.02.

  41. incognit000 says:

    19+77+5 = 101%

    I knew there were more houses out there than needed to be because of the bubble, but damn. There’s so many houses going down in value that 100% can’t contain them all!

  42. sleze69 says:

    Zillow estimates my house’s value at like $30k HIGHER than it really should be. Hopefully if I have to sell in the near future, prospective buyers will see that and up their offer prices.

  43. palookapalooza says:

    According to Zillow, my house has gone up 72% since I bought 6 years ago. My next door neighbors just sold their house for $5K more than Zillow’s estimate.

    Interesting. Looks like the market in my neighborhood is not so soft after all…

  44. Robobot says:

    Zillow is giving a pretty accurate representation of the housing bubble in the D.C. area. The house I’m in was bought for around 300K in 2004, was in the 520K’s in 2006, and is now down to 403K. (Ouch!)

  45. ShadowFalls says:

    Mine was recently appraised, it is worth $25k more than listed on Zillow.com. The value actually dropped $20k within the last year… Thank you mortgage companies for ruining the housing market.

  46. magic8ball says:

    Zillow has my house listed at about $60K more than what I paid for it two years ago, which is ridiculous. They also have more bathrooms listed than I actually have. Not sure where they get this info.

  47. theblackdog says:

    I live next to a housing co-op, one of my friends says that they’re not likely to go down as much in value because of the tighter standards to buy a house and based on past recessions. I should see if she’s right. Maybe I will take a ride around the neighborhood tonight to see how many of the houses are for sale and if any are marked as foreclosures.

  48. superchou says:

    Mine is right about where it should be $185K. Which is up about 5K from a year or so ago. My area is still gaining equity – albeit slowly – this is validated by the real estate reports as well.. The husing bubble did not hit Baltimore like it did other areas thankfully – we gained a lot of momentum but lost little if anything as all… just a big slow down in sales. I remember the days when a listing in my neighborhood would be snapped up within a matter of days to 2 weeks… not anymore sadly.

  49. SpdRacer says:

    @SkokieGuy: This is very true, the overall approval rating for Congress is like in the mid-teens. But, when people rate their individual state representatives it is like 60-80% approval.

  50. BrAff says:

    @Meggers: My brain is still recovering from this portion of my life, but in general:

    -People think that adding a stainless still refrigerator to their otherwise craptastic kitchen is a sure fire way to increase value…

    -When you tell a lender that you have a pool, make sure you explain it is an above-ground that is 1/2 full with water 1/2 full with rotting tree branches and leaves that have fallen into it BEFORE the appraisal is ordered…

    -You would be amazed at how dirty some people have their houses and just do not care. I am not talking about a few dishes left on the counter or even some pet stains on the carpet… i mean junk everywhere! If you were going to pay to have someone come to your house and determine the value of it, in order to obtain financing/refinance/etc, wouldnt you spend a few minutes picking things up at the very least?

    -Put away your bongs… we don’t need to see them.

    -Just because your neighbor sold his house for $750,000 does not mean your house is worth that much… he has 2 more bedrooms, an extra bathroom, 1,500 more sq ft of gross living area, etc…

    -Yes I saw what zillow said for your home… unfortunately they are using comps from 3 years because you live in the middle of nowhere.

    -So you are remodeling your home, ran out of money and are looking to get cash-out? hmm… i don;t think the bank will like pictures of what your bathroom will look like in 6 months

    @ShadowFalls: it wasn’t just the mortgage companies… they didnt force people into ridiculous loans. That being said, there are TONS of mortgage “professionals” who should not be allowed to manage a McDonalds, nevermind entrusting one of your most important financial assets. If a person is looking at refinancing/purchasing/etc, please make sure you understand the documents completely… understand the difference between a 5-yr fixed ARM, a 30-yr fixed, and an Option Arm… know the difference between a fixed rate second and a HELOC… find a friend, family member, or person you trust that understands this stuff if you dont… a good faith estimate is a fancy piece of paper that doesnt mean shit when it comes time to sign your final docs…

  51. TheStonepedo says:

    The tax assessor says my house is worth less than I paid for it. I have improved the house (new roof, new carpet, paint, and trim) and yard (new grass and a vegetable garden in the back, new landscaping in the front) and am happy that the house’s taxable value remains low. Quality construction, contemporary interior finish, and an attractive lawn will add value to my home that tax assessors may have little time to consider.

  52. dachuckyb says:

    My landlord is trying to sell my house for $195k. I’ve talked to all my neighbors and they just laughed at that price. He paid around $179k for the house. Zillow says the house is worth $175.5k. I’d say that zillow is accurate because there have been NO improvements done to the house since this landlord purchased this house. My landlord also purchased this place 2.5 years ago. Also, the basement got damaged during a flood and tornados ripped through the area 3 days ago.

  53. hills says:

    @Aladdyn:
    Don’t know about elsewhere, but in my hood our neighbor’s house didn’t appraise for the contract price and they had to lower the price to what the appraisal was – otherwise the bank wasn’t approving the loan.

  54. timsgm1418 says:

    @Aladdyn: good point, kinda forgot about that.
    I get a daily email for listings in my area, just so I can keep on top of the prices. I’ve noticed that single family homes in my area have remained about the same or a little higher, but townhouses have gone down. My guess is because if it costs just a little more for a single family home, people will buy them instead

  55. JulesNoctambule says:

    I had to check Zillow, of course, and was surprised to see that the information for most of the houses on my street was incorrect as far as the numbers for bedroom, bathrooms and square footage go. Ours is listed as a 2/1 when it’s a 3/2 and has been for years. The price wasn’t far off what we paid, though, which was still substantially less than what houses appraise for in our neighbourhood.

  56. Burgandy says:

    Anyone know where zillow gets their info? They claim the house I grew up in has no bedrooms, and I remember sneaking out of mine frequently.

  57. Bramble73 says:

    A house across the street from me tried to sell their house for over a year before taking it off the market and renting it out. They started at a highly inflated price for the neigbourhood, but close to what Zillow had because technically they had more square footage then many of the other houses around them. But square footage can’t make up for an awkward layout and outdated kitchens and bathrooms. Over the course of the year they reduced the price about $100,000 and still couldn’t sell it. (And it was still higher then what any other house in the neighbourhood had sold for) If they’d started at the reduced price at the beginning of the year I think they would have been able to sell it easily.

  58. Meggers says:

    @Braff: Ha! Some of those are hilarious. When we were closing on our house, our realtors (ours and the sellers) were killing time waiting for the broker and told us some great horror stories.

    Like the family that had Tie Dye walls in the kitchen and living room and refused to paint over them. Maybe leaving some tacky decorations and paint up worked at the peak of the bubble but not in this market.

    There was also the sellers who didn’t want to sell to “insert minority here”. They didn’t understand why that stance was illegal and our realtor decided that they weren’t worth working for.

  59. yagisencho says:

    Hm. Our next door neighbor recently sold their house (identical model, no improvements) for $405k. We bought ours seven years ago for $240k. And we’ve made several significant improvements. I’m guessing we could get $440k if we timed it right.

  60. balthisar says:

    I hope Zillow’s not too far off the estimate. It only means I depreciated a little bit! Since 2004. Lots of improvements, so given SE Michigan’s current state, I don’t feel bad, and (knock on wood) don’t plan on leaving.

  61. BMRFILE says:

    The way zillow works is that it takes a median number (not average, or actual assessed values from local governments) of the prices of sold houses in your area. So with the current waves of foreclosures and short-sales across the country, it’s only going to drag the numbers down even further. The actual value on my house is higher than what Zillow indicates simply because I live in alifornia, and everyone and their mothers are foreclosing their homes. But it is very upsetting to see our house is upside down $100k after 3 years.

  62. Holy shit, Zillow’s estimate of my home value has reached new heights of absurdity, estimating its value at NEARLY DOUBLE what we paid for it four years ago! I don’t think I actually believe their sales figures for homes in my neighborhood — those are ABSURD numbers.

    The county tax assessor believes my home has risen in value by a small and reasonable amount. I’ll believe him. (We weren’t in an overheated market, so didn’t crash.)

    A house across the street from me just sold in foreclosure, but that was because the owners got into drugs and stuff, not because of a bad mortgage. On the plus side, the foreclosure sale means I have a lovely new neighbor in his early 20s for whom the actual price of this neighborhood wasn’t affordable, but the foreclosed price was, and he’s very handy so making th eplace lovely!

  63. henrygates says:

    Maybe people are just looking at their TAX appraisals! UP UP UP!

  64. Landru says:

    I have heard this rule of thumb about the real value of a house – 150 to 200 times what you can rent it for, depending on how desirable the neighborhood or area is.

    Here in the SF Bay Area, I rent a house for $2000 a month – it’s worth (or will be when things settle down,) between $300,000 to $400,000 month, probably closer to $400,000. It used to be worth probably $800,000.

    It has to do with return on investment as a rental – not as a pyramid scheme or tulip mania instrument. Banks will want to loan you the money to buy it, but you have to have enough down payment to cushion the loss as it continues to fall in value.

  65. revmatty says:

    Zillows’s numbers have always been wildly inaccurate at best. In St Louis (where housing prices were up a whopping 20% at most at the peak of the bubble and have not come down all that much either) they usually seem to be anywhere from 30% to 60% above current market (I base this on some homes that have actually sold recently in a my neighborhood).

  66. bohemian says:

    I checked our house price this spring and we were still up 50k from what we paid for it three years ago. Houses here are incredibly cheap so that is a lot of money. What I find slightly amusing is that there are lots of fly by night home builders who got into this during the bubble and were building new homes like crazy. Now some of them are doing “fire sales” on these new houses trying to get themselves out of debt to the bank. I saw one drop house prices $100,000 this spring. Another one is doing the same thing now trying to unload all of his new houses. Used houses are still staying pretty high by comparison. The average home price around here is about $150,000

  67. pigbearpug says:

    I live in a condo on a lot where there used to be a house and it hasn’t been updated…after 2 years.

  68. lordargent says:

    Zillow is only as good as the data that goes into it.

    IE, if there haven’t been a lot of sales in your area, it will be highly inaccurate.

  69. Not one bit! My home has depreciated in value by 31%!

  70. MorrisseyTheCat says:

    @Youthier: Gotta love nosey neighbors who equate their own limitations for staying in the market with others ability to do so. We just sold our home in one of the WORST markets there is. Made many mistakes when buying it a few years back…house much nicer than most in the neighborhood, bad school district (we didn’t care), crime we didn’t know about until after moving there. We HAD to get out of there asap…so we bought a house an hour away in a nice area, got the old house ready to sell, and boom, the media went full blast with the housing market here and “nothing was going to sell.” To us, we were just grateful to get out of there, and planned to hold strong with our price regardless, because we knew that we had a great product and the market would eventually have to go back up. We weren’t under any delusions, and knew that before we even put it on the market it needed to be painted in neutral colors, be immaculate, etc. I’m in shock how many dark purple walls, and country clutter decorated kitchens are on the market. People just don’t share the same eccentric tastes…they need a blank slate that they can envision making their own.
    ANYWAY, all our nosy neighbors thought we were on something, and projected that we should be desperate and let the vultures take advantage and steal our equity for nothing, just because the market is bad now. We fully envisioned at least 2 years the way the talk was, and voila…8 months later (which is a mere blink here) we not only sold it, but sold it for a mere $1,000 less than asking price. We just laughed at some of the feedback, though…people just assume that everyone in America should just give away their houses because the market is bad and foreclosures abound all around. Well…you get what you pay for with a foreclosure house, but we knew we had a home that had plenty of historical character, which was still a STEAL for someone looking for such a place. Not everyone bought houses they couldn’t afford and should jump at any crumb offered if they can objectively assess what they have (and not what they “need” if they got in too deep). By the same thinking, neighbors shouldn’t assume that their situation is the same as others or that their property is automatically comparable just because it is in the same block.
    PS– Mortgages for bad credit people still abound (fortunately for the sellers, unfortunately for our economy). Sad that credit worthy people are getting the “business” while others are still have boatloads of money handed to them that shouldn’t. Thanks “gift” programs and FHA borrowers! Funny our buyer had NO cash to put down on a house r anything but got an open-ended mortgage that enables her to keep borrowing more to make improvements (on a house already way OVERimproved for its neighborhood)…and already started doing so. Argh, our poor house…hopefully it won’t be neglected when she forecloses. You know what they say about suckers….Oh well, it was her decision.

  71. MorrisseyTheCat says:

    BTW– Meg Marco should get a Consumerist gold star or something (at least a kitty treat from Morrissey). I skim the topic titles and just click on the ones of interest, and almost every time it is a Meg Marco addition, plus commentary (not just linking off other sites, but thought involved/interaction with the subject). Nice job!
    Mozzer approves this message.

  72. TootTootToot says:

    @incognit000:

    Just in case you were serious, the sum of 101% (19 + 77 + 5 = 101) is probably because of rounding. For example: 18.5 + 76.5 + 5 = 100

  73. mariospants says:

    ummm… glad I moved to Canada, no loss of value here. I just sold my house in the dead of summer in 1.5 weeks for $250k more than I paid for it in 2004…

  74. mariospants says:

    OH, btw, a must-see if you haven’t already: [lovelylisting.blogspot.com] extremely hilarious.

  75. ShadowFalls says:

    @Braff:

    No they didn’t force those people. But they approved them for loans they knew they weren’t going to be able to handle. It sounds like a stupid idea to begin with.

    You wouldn’t personally loan money to someone you know, yet alone a stranger, full knowing that they would not be able to pay you back. Why would a financial institution designed to make money do the same? Just simply idiotic.

  76. MorrisseyTheCat says:

    @mariospants: OMG that’s an understatement! Awesome link, lol! :)

  77. CumaeanSibyl says:

    My house is almost certainly worth more than we paid for it a year ago, but I don’t know if it’s worth more than the sale price plus the money we’ve put into renovations.

  78. zolielo says:

    Appraisals are generally $300 to $400 for a SFR

  79. ShariC says:

    I wonder if the way in which people over-value their homes is related to tax assessments. My family’s home in rural Pennsylvania (where the market is not competitive and prices are very low) is valued at $42,000 when it comes to calculating their property taxes. They feel that they probably could not sell it for more than $36,000 (and they’d be hard-pressed to get that much).

    I wouldn’t blame obliviousness entirely for a tendency to overestimate.

  80. DallasPath says:

    I live in the Dallas area, which is one of the few places that hasn’t seen a significant decrease in home value, mostly because we never had a significant increase. Zillow and my tax assessment are pretty close in value and show an appreciation of about 40k in 3 years.

    The thing is, I love my house. I never would have bought it if it was not what I wanted. I’m not planning to move or sell for quite some time. Most importantly, I’m not planning to get rich off selling my house.

  81. darkrose says:

    My home has increased in value by by about 2% since I purchased it in November 2007. The house I sold is up about .5% (and about 4% from the purchase price I sold it for, which was roughly double what I paid for it). This is Northeast Florida (Jacksonville & surrounding areas)..I hear the only people losing value are McMansion owners. The house I sold was a 2/1 bungalow and those are in pretty good demand now, my new house is a 3/2 ranch house. A little bigger than I need right now, but not too bad.

  82. Youthier says:

    @MorrisseyTheCat: Yeah, you’re right. Not everyone is the same.

    But the people that I was referring to are morons with no common sense. I could give you about a 100 more examples. :)

  83. fett387 says:

    Zillow is a scam. According to them my house doubled in value since I bought it last year. $250K -> $500K. (No, I don’t live in or near the city)
    It often changes by $50K in a day!

    My neighbor is trying to sell their house according to Zillow. It’s been a year and his “For Sale” sign is now growing moss on the north side of it.

  84. MorrisseyTheCat says:

    @Youthier: Oh, I a sure… When our house was for sale we spent a lot of time looking at pics on realtor.com of the “competition,” and I just cannot believe what SO MANY people are even thinking. I kid you not, PINK dining rooms were a recurring theme. A lot of the places (with seemingly nice potential) looked like crash pads where 15 people could have been living. One thing that really irks me (and this was brought up on the show “Flipping out,” is when people downright lie or seriously exaggerate aspects of the home to get people in there to look. That is SO not the right approach, because it just p*sses people off and they want nothing to do with the house…wastes everyone’s time. I have looked at a house that actually had ZERO legitimate bedrooms or full bath. One on the first floor seemed no different than a closet, and the ATTIC held the “master bedroom” and “full bath”. Mind you even then, the toilet and bathtub were in the middle of the whole attic setup, no walls or doors. Sure made it seem great online though…what a waste of time

  85. MonkeyMonk says:

    I guess I’m in the lucky 19% because according to Zillow our house value has increased 11% in the last year and a whopping 62% in the last 5 years.

    Zillow used to wildly overvalue our property but with the formula rejigger they did a while back it actually seems to be pretty accurate for our area now.

  86. enine says:

    I remember someone showing me zillow when I first put my house on the market and how it had the value of my house at almost twice what it was really worth (and finally sold for). They aparnetly forgt to average in all the sold for 50k at auction houses next to us which brough the value of the whole area down.

  87. moracity says:

    A home is not an real estate investment, it is a purchase on credit. It is no different than buying a car and you should not expect the value to increase. Why on earth would you expect something that is getting older and more worn to be worth more than what you paid for it?

    It doesn’t matter what your home is worth after you have purchased it. It doesn’t change what you owe the lender. The only thing that matters is that you paid what you feel it is worth. Someone else may be willing to buy your home for more than you did, but the intrinsic value of the home itself is really only replacement cost.

    The only portion of your home that will increase in value automatically is the land itself. This is due to laws of supply and demand. There is limited land, so the value should generally increase. Of course, the value of the structure may decrease and cancel out the property value.

    People always think what they own is worth more than it may really be because there is an emotional attachment. Just look at cars for sale. Anything you are trying to sell is only worth what someone else is willing to pay for it. Period.

  88. squidbrain says:

    Just bought a home and spent a lot of time looking at listings and sales. People are definitely in denial big time. Those who have to sell are dropping their prices but many (most?) are not and those homes just sit around with no action. As for Zillow they definitely error on the high side but what do you expect, they want people to visit their site so of course they are going to give you “good news”.

  89. erratapage says:

    Hey… Zillow’s estimate is twice what we paid for it. Of course, we did an addition and finished the basement, and it doesn’t list our new square footage or the fact that we now have five bathrooms instead of three. If I were to sell my home, I would switch out the windows in my office to make a “legal” bedroom and sell it as a four bedroom, five bath house with a workshop addition. I think it would sell for about Zillow’s estimate, but there’s no real housing bubble involved in that.

  90. BrAff says:

    @ShadowFalls: I agree with that statement. I just think blame should be spread around, not placed squarely on one side… everyone involved was/is greedy. Homeowners, appraisers, mortgage lenders, banks, etc… Some saw a chance to make some quick money and now most are paying because of it.

    By the way, I still hear stories of people signing up for Option Arms… and lenders making LOTS of money on them. It is “mind-bottling”…

  91. chauncy that billups says:

    I paid $87/SF in a neighborhood with an average of $125 (the seller was very motivated). and the house is structurally sound and has no defects. So I think it’s safe to assume that mine will appreciate against what I paid for it.

  92. Stonecutter says:

    @fostina1: And mine is worth $30k less than I sold it for last month. Those estimate tools are worthless.

    Here in Dallas we have pretty much avoided the housing issue (other than all those Countrywide employees now crowding the job market), but we’re getting close. Our house was in a prety high-demand area (M streets),and we turned a decent profit (bought in ’04), but I’m pretty sure we would’ve gotten the same price last year.

    We bought the house as an investment (ie we paid more than we could afford) and it worked out ok for us. But never again.

  93. mzs says:

    @MorrisseyTheCat: Regarding the lies, when we bought a house a few years ago there was one nearby that listed “Jacuzzi tub” and when we went to see it there was no hot tub. In the bathroom there was the very same builder bath tub that every house in the neighborhood had with simply a “Jacuzzi” sticker applied, askew.

    I get a sickening feeling when I realize that our house is worth about 10% less than what we paid for it and that we have put more than 20 grand into the place repairing it. In our case we needed to get into a decent school district before our kids started school.

  94. MorrisseyTheCat says:

    @squidbrain: So, obviously, those people don’t HAVE to sell as quickly as those about to foreclose, so if they can afford to hold out until the market comes back up they are SMART to do so….How do you know there is no “action”? Maybe (like us) they had plenty of action, but nothing worth losing their shirt if they can afford to hold off until it either starts improving, or someone clueless about the area snatches it up because it is a bargain compared to what they are used to seeing. Don’t assume you know what people’s intentions/financial situations are….
    (This is a totally separate issue from those who put ugly ducklings on the market and expect to make a windfall)

  95. MorrisseyTheCat says:

    @mzs: lol! I see that jacuzzi thing ALL the time, and 9 times out of 10 it is just a regular bathtub in the bnathroo with a couple of jets. Nice way to antagonize potential buyers right off the bat when they realize what is really going on…

  96. MorrisseyTheCat says:

    bathroom! eek

  97. MorrisseyTheCat says:

    Hey anyone live in weird disclosure states? Meaning, like here in Ohio, we had to fill out something that was attached to the disclosure that disclosed our mortgage type and what we owed on it (none/nothing). Is that a new Ohio thing, or is it just something my realtor stuck in there for whatever reason. Seems like it would put a lot of sellers at a seriously unfair disadvantage against the vultures… I found it very odd, but it was the first time we sold a house….

  98. coraspartan says:

    Zillow is useless…2 weeks ago I checked my home’s value and it listed it as $99,900. (I almost had a heart attack because that means it’s lost 1/3 of its value since we bought it six years ago.)

    Today I checked Zillow and it lists my home’s value as $165,900. I’m pretty sure my home’s value hasn’t skyrocked $66,000 in two weeks. Especially since I live in the Metro Detroit area, where home prices are plummeting.

    If I had to make a reasonable estimate, I would say my home is worth about $20K less than what we paid for it six years ago…which means we are about $12K upside down on our mortgage. Ugh.

    I sure as hell hope the market turns around in three years because we’re planning on selling then. If not, I guess we will be forced to stay until in it until we can at least break even.