Homeowners were less confident about the value of their homes in the second quarter, with one-third believing home prices had not yet reached a bottom, real estate website Zillow.com said on Thursday.
Nevertheless, a significant number of homeowners said they planned to put their home up for sale in the next six months if they saw signs of a real estate market turnaround.
Homeowners were more pessimistic about the short-term future of home values in their local market than they had been in the previous three quarters, according to the Zillow Second Quarter Homeowner Confidence Survey.
Indeed, 33 percent believed home values in their local housing market had not yet reached a bottom, while 38 percent believed they had already reached a bottom.
After years of hearing news about the housing recession, homeowners really understand the realities of the market, Stan Humphries, Zillow's chief economist, said in an interview.
Nationally, 28 percent of homeowners said home values in their local real estate market would decrease in the next six months, up from 20 percent in the first quarter.
Additionally, less than one-third, or 30 percent, believed home values in their local market would increase, down from 42 percent in the first quarter.
Homeowners also became slightly more pessimistic about the performance of their own homes' values in the past year.
Zillow said less than a quarter, or 24 percent, of homeowners said their home had increased in value in the past year, compared with 27 percent in the first quarter.
In reality, 34 percent of homes increased in value in the second quarter, according to the Zillow Q2 Real Estate Market Reports.
Looking further into the future, however, 27 percent of homeowners believed their own homes' values would increase in the next 12 months, 35 percent believed they will stay the same, 12 percent expected a decrease and 26 percent did not know.
Of those who expected their homes' values to increase, the median expectation was a rise of 6 percent, although that varied by geography.
Northeastern and western homeowners who expected an increase anticipated a median rise of 10 percent, while southern and midwestern homeowners expected a median increase of 5 percent. Those who expected their homes' values to decrease in the next year anticipated a median decrease of 10 percent.
Despite the increasing pessimism, a large number of homeowners were anxiously awaiting the opportunity to sell.
Indeed, 5 percent of U.S. homeowners said they were very likely to put their home on the market in the next six months if they saw signs of a real estate market turnaround.
Zillow said this translated into 3.8 million homes with the potential to come into the market. By comparison, 5.2 million existing homes were sold in all of 2009.
As these homeowners hear news of stabilization in home values, they put their homes on the market, driving up inventory and keeping a cap on home value appreciation, Humphries said.
This is part of the reason Ziller is forecasting an L-shaped recovery in which home values, once they hit bottom, would experience very low annualized appreciation for the next three to five years, he said.
(Editing by Gary Hill)