The Equity Question - Revisited

Building on the article I wrote on Friday I'd like to talk about an article I read over at CNN Money that discusses homeowner's who are in denial.  

Harris Interactive conducted a survey for Zillow.com of homeowners.  The poll was to see if homeowners believed their property value had declined in value.   The survey of 1,619 homeowners found 36% believe their home has increased in value, and another 41% believe their value has stayed the same. Only 23% believe their home has lost value.

While I do know that not all home values have decreased (values in the area around my personal residence have increased around 4% this last year), those other 77% have a rude awakening coming.  If I were the lending institutions that survey would scare the heck outta me.  When those people do realize their house price has declined, will they decide to walk away too?

Now I know that there is a good margin of error on this survey.  It was of all homeowners.  Those people that have been in their house for 10 years will most likely not walk away, that is unless they did a cash out refinance and are now upside down.  A survey of those who have been in their home less than 5 years would be more accurate in gauging the market for the risk of the “walk away” happening.

web log for us - those that owning the home you live in is a long road, not a quick investment

This post was found on webLOGfor.US
Follow the link to get to the orginal message.