Homeowners in Denial About Property Values
A recent report from Zillow shows that homeowners are still having trouble recognizing the drop in their current property values. When homeowners list their properties on the site they typically list them for an average of 14% higher than the actual value of the home.
Stan Humphries, an economist from Zillow predicts that homeowners who purchased their property after the bubble burst usually feel that they escaped the major value drop, while actually prices have fallen an additional 12% since January 2009. Instead of pricing one’s property based on how much they purchased the home for originally, potential sellers should price the home comparatively with other properties currently on the market.
Some homeowners are forced to price their property at a higher value because they are already underwater on their mortgage and owe more than the home is worth. If they didn’t price it higher they would have to try and receive a short sale. Others, simply don’t want to face the fact that values have dropped so much.
