75% in Survey Think Worst is Over in Housing Slump

Source: The Dallas Morning News
Publication date: May 14, 2009

By Steve Brown, The Dallas Morning News

May 14--Three out of four U.S. homeowners think the worst is over in the housing market.

And half of the homeowners in Southern states -- including Texas -- say home prices will stabilize in their areas in the next six months, according to a new survey by Zillow.com.

Researchers for the Internet real estate marketing company quizzed almost 1,400 homeowners around the country in early April about where they thought the housing market was headed.

Almost half of the homeowners who live in Southern states said their home prices have fallen in the last year. That's about the same percentage the company reported at the end of 2008.

Nationwide, 60 percent of homeowners interviewed last month said their houses were worth less.

The National Association of Realtors reported earlier this week that median home sales prices across the country were down almost 14 percent in the first quarter from a year ago.

Zillow estimates that about 70 percent of homes in the U.S. Southern region have actually lost value in the last 12 months.

Almost a quarter of homeowners in the South said they think their properties will increase in value during the next six months.

"While homeowners are now more realistic when looking backward, they are still pretty starry-eyed when looking forward, with three out of four homeowners believing that their own homes' prices will increase or be flat over the next six months," Dr. Stan Humphries, Zillow's vice president of data and analytics, said in the report. "Unfortunately, there are few markets we expect to perform this well."

Thousands of potential sellers are waiting on the sidelines, Zillow said.

More than 30 percent of homeowners said they would be likely to put their houses up for sale at the first sign of a market rebound. That's bad news for prices.

"With almost a third of homeowners poised to jump into the market at the first sign of stabilization, this could create a steady stream of new inventory adding to already record-high inventory levels, thus keeping downward pressure on home prices," Humphries said.

Harris International conducted the research for Zillow's report April 6-8.