Zillow Survey Finds Homeowner Perception of Value Close to Reality

American homeowners are overly cynical about where their homes' value moved in the fourth quarter 2009, according to the latest Zillow Homeowner Confidence Survey. The survey gave a Zillow Home Value Misconception Index of -2; zero is when homeowners' perceptions and reality are equal. The index is in negative territory because only 20% of homeowners said their property value increased in 2009; the reality was 28% of homes increased in value last year. This is the first time the index has been negative and the closest it has been to zero since it was introduced in the second quarter of 2008. About half the respondents believe their homes lost value last year (in reality it was 65%) while 30% said the value said the same (in reality, 7%). Stan Humphries, chief economist at Zillow, said "Given recent news about the stabilization of home values in some markets, I can see why homeowners are so optimistic. However, home values in many markets are still under substantial downward pressure from high levels of foreclosures and we don't believe we'll see a definitive bottom nationally until the second quarter of this year. We're not out of the woods yet."