August 07, 2008

Welcome To Self-Delusion! Population: 62 out of 100.

I've noticed that most of the houses for sale in my little area of the world are asking what I find to be high prices, and have said as much to a number of people. This article in the WSJ might hold a key as to why, if the housing market is so bad, those sale prices aren't lower.

In its second quarter survey, 62% of the 1,361 homeowners who responded to the survey by Zillow said they believe the value of their own homes has increased over the past year.

But according to Zillow, that high level of optimism is out of sync with reality. The company’s research shows that the 77% of U.S. homes depreciated in value over the past year. Only 19% appreciated and five percent remained the same.

I don't pretend to know much about the housing market, but it seems to me that this presents more than a bit of a problem. This seems like it would create a situation that is neither a buyers' market (as houses are overvalued) nor a sellers' market (people won't be able to get the prices they want). That purchasing stagnancy has got to be bad all around.

1 comment:

  1. Well at least you're looking to buy that's good news!
    But seriously, I've thought about that as well.