In a recent survey by Zillow, the vast majority of the homeowners surveyed think their houses lost value over the past year. This is hardly new in itself, as doitinvest.com has warned about it a few times. however, the 51% who sustain this statement is really worrying.
The 49% who said the value of their homes staid the same or increased is much less than the July survey when it was at 62%. In reality three quarters of the homes have fallen in value over the past year, according to the same survey.
The median price of an existing home dropped to $191,600 in August, down from a record high of $230,200 in July 2006, according to the Chicago-based National Association of Realtors. The disconnect between owners’ perception of value and actual market conditions makes it harder for real estate agents to price homes to sell, Humphries (VP of Data and Analytics at Zillow) mentioned.
Purchases of existing homes jumped 5.5 percent in September to a 5.18 million annual rhytm, the highest level in a year, according to the National Association frealtors. Part of the reason is that a flood of less expensive foreclosed property drew buyers.
After all, people need a home to live in… This is why in a recession some optimism still remains and real estate can be a good long term investment.