Consumer Confidence Lacking For Real Estate Market

Consumer Confidence Lacking For Real Estate Market

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Consumer confidence remains low when it comes to the housing market with 1 in 3 thinking that the worst has yet to come. At the same time, some 38 percent of the people surveyed by Zillow.com are also saying that home prices have reached bottom.

That’s mixed news for people who are trying to sell their homes, for prospective buyers, and for the country as a whole. Home prices have been sliding since 2007 with some local markets in steady decline since then.

Zillow is the online real estate website; the company commissioned Harris Interactive to conduct the survey on their behalf. Those results were released last week.

Survey Says

As with most surveys of its kind, there is plenty of meat to be digested. Zillow says that five percent of the people surveyed say that they are very likely to put their home on the market within the next six months if they see signs of a real estate rebound. That could mean that 3.8 million homes would be added to the market, perhaps creating an unprecedented buyers’ market.

Homeowners are not convinced that their home values are holding up with just 24 percent believing that their homes are worth more than they were a year ago. Zillow says that homeowners may be pessimistic as their own data shows that 34 percent of American homes increased in value during the second quarter of this year.

Doctor Opines

Dr. Stan Humphries, chief economist at Zillow.com noted that the ongoing negative news about the housing market and the drop in sales following the end of the federal tax credit have contributed to homeowner angst. Humphries expressed surprise that so many people believe that home prices have bottomed saying, “Although our Q2 reports indicated signs of stabilization in 30 percent of markets we cover, we’re concerned that this was at least partly due to the homebuyer tax credits. We’re already seeing payback for the credits in the form of declining home sales, and this trend will push up inventory levels and exert downward pressure on home values.”

If the markets improve enough over the coming months where people decide to sell their homes, then home prices will slide further as the available inventory increases. Unless demand meets supply, then home prices may slide further.

Rate Decrease

In related news, mortgage rates continue to fall, continuing to set new record lows. 30-year fixed rate mortgages are now 4.36 percent; 15-year fixed is now 3.86 percent according to Bloomberg.

Adv. — If you’re planning to sell your home in 2011, then making needed updates now will help you put your best foot forward. Visit LetsRenovate.com for home improvements tips.

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