Instant Home Valuation

Friday, July 6, 2012

People Believe Homes Prices Will Go Up

Such is the indignant refrain heard across Greater Fargo Moorhead

and country from homeowners unable to get a grip on real estate reality.

Increasingly bullish on prices, homeowners are haggling with their real estate agents over the value of homes, a new survey finds.

More than 77 percent of agents and brokers surveyed by HomeGain during the second quarter reported having disputes over homeowners believing the recommended listing price just didn't do justice to the true value of their properties.

It indicates a disturbingly high level of overconfidence, even entitlement among homeowners. And, if anything, this belief that one's house is somehow exceedingly special and can't be judged by ordinary market metrics may only be headed up given present trends.

While agents could previously point to a declining market to try get a more workable price, that task is becoming more difficult as signs point towards a turnaround in prices after years of declines.

Justified or not, there has been a surge in optimism over the direction of home prices over the past few months.

Nearly 60 percent of homeowners surveyed in a recent, nationwide poll conducted for HomeGain believe prices will rise over the next two years.

Just a year ago in the spring of 2011, the consensus among homeowners was that prices were headed down, not up.

Here's what HomeGain had to say back in June 2011:

Most real estate professionals and homeowners continue to expect home values to decrease or stay the same through the end of the year. Fifty percent of agents and brokers and forty two percent of homeowners think that home values will decrease over the next six months.

Buyers, meanwhile, are paying the price of this common delusion among homeowners that their castles are somehow special, destined to fetch a higher price even as their neighbors sell for a loss.

Roughly 58 percent of home buyers surveyed argued the listings on the market that they are seeing are overpriced, according to HomeGain's second quarter survey.

Maybe so, but not my house! It?s special.

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