Homeowners’ perceptions of the state of the housing market may finally be moving in line with reality. According to Zillow’s Q4 Homeowner Confidence Survey, more than half (57 percent) of homeowners believe their own home lost value during 2008 compared to 51 percent at the end of the third quarter and 38 percent at the end of the second quarter. In reality, 76 percent of U.S. homes actually decreased in value in the fourth quarter, according to Zillow data.
However, many homeowners appear optimistic about their own home’s value in the future. Less than one-third (30 percent) believe their own home’s value will decrease in the next six months, down from 40 percent at the end of the third quarter. Less than half (47 percent) believe home values in their local market will decrease over the same time period.