I was stunned when I saw this. Why am I so focued on housing? Because I feel the disinformation out there on it is staggaring and hope to give folks a different, more accurate outlook on the situation.
First, 60% of homeowners think their home has fallen in value and 22% say it has stayed the same. Reality? 80% have lost value. Which means 20% of homeowners are not living in reality.
Here is the chart that got me:
So, 31% of all homeowners out there are likely to add to record home inventory levels at the first sign of improvement in the housing market. Now, we need to define “improvement”. According to the survey, the top response from 71% of people, think the market is improving if “there is evidence homes sales in my neighborhood are increasing”.
What does this tell us? At the first signs of stabilization in housing, it would seem we have yet another wave of inventories set to hit the market from people wanting to sell their home.
This again leads to a negative view on housing. Look at the supply demand equation:
Demand Decreasing:
- Foreclosed buyers cannot go out and purchase another home
- Tightened credit standards by banks eliminate marginal buyer
- Rising unemployment
- Falling prices reduce existing equity used to roll into new homes
Supply Increasing:
- Foreclosed homes hitting market in record numbers
- Homebuilders still building new homes
- 31% of existing homeowners ready to put homes on market at first sign of market stabilization
Full Report:
Disclosure (“none” means no position):