Western Homeowners More Negative About Home Values
Homeowners in the West are more pessimistic about home values.
Declining home values may lead some consumers to walk away from their homes rather than avoid foreclosure because they are underwater on their mortgages.
Recently, mortgage marketplace Zillow.com presented a first-quarter report highlighting homeowners' confidence in home values. The report showed that people in western states such as California were more pessimistic that then rest of the country.
Eighteen percent of people in the West felt as though their homes had increased in value. However, the reality is that 31 percent of properties in that part of the country saw values rise during the first quarter.
Stan Humphries, chief economist for Zillow, said that after the housing market reached its peak, many people in the West felt as though their homes were worth more than they actually were.
"Conversely, after years of press coverage about declining home values, homeowner perceptions are now in line with market conditions from early last year, although the Western market has improved since then," Humphries said.
The recession saw the unemployment rate increase and incomes decline, leading to some people not being able to avoid foreclosure. As a result, home values fell in areas that saw a large number of people lose their homes.
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