A new Gallup survey seems to indicate that Americans
are falling in love with real estate again.
The poll, conducted among over a thousand respondents this month, shows
that 56 percent of Americans think the average price of a home in their local
area will increase compared to only one-third who thought so two years ago and
21 percent, a survey low, in January 2011.
Another 34 percent expect prices to remain at about the same level,
leaving only 10 percent who believe prices will fall again. The current euphoria
is not up to pre-crash standards, but is closing in on the peak 60 percent who
expected appreciation in late 2006.
The results were gathered by Gallup’s annual Economy and Personal Finance
poll, which has tracked Americans’ perceptions of the housing market annually
since 2005. In the years following the
housing crisis, 2008-2011, Gallup said Americans were more likely to look for
declining home values in their local area than any appreciation. That began to change by April 2012 when public
optimism about home values outweighed pessimism by 33% to 23%. Now, more than
five times as many Americans believe local home values will increase as believe
they will decrease.
There is a strong regional bias in the survey with those living in the West most
likely to think home values will increase, at 72%. Prices have risen by double digits in several
western states, especially California. Conversely
only 44 percent of residents in the East expect price increases. Attitudes of those in the South and Midwest closely
mirror national numbers at 54 percent and 53 percent respectively.
Gallup said respondents’ opinions may be influenced by their own
experiences. About 64 percent of Americans
are homeowners and 74 percent of them say their home is worth more today than
when they bought it. Last year 63
percent said their homes had increased in value and 53 percent made this claim
in 2012. Even with the increase however,
homeowners are nowhere near where they were in the 2006 and 2007 surveys when
upwards of 90% of homeowners said their home value exceeded the purchase price. Responses to this question may also mean that
fewer homeowners are “underwater,” owing more on their mortgage than their
houses are worth.
Seventy-four percent of Americans say it is a good time to buy a house,
while 24% call it a bad time. That ranks among the most positive readings
Gallup has received. Responses to this
question actually bottomed out at the height of the housing boom when prices
peaked and only 52 percent considered it a good time to buy. Even as home values plummeted over the next
two years Americans continued to be pessimistic about buying a home. In 2009 when depressed home values meant
houses were a better buy the number grew to around 70 percent and has remained
near there with what Gallup called “marginal increases” in each of the last
three years. Homeownership factors into
this response; 81 percent of current owners consider it a good time to buy but
only 60 percent of renters.
Gallup says that Americans’ views of the housing market were clearly shaken
during the downturn, but have mostly recovered today. The nearly three in four who say it is a good
time to buy a house could reflect the realization that the worst of the housing
crisis is over, but that values have not yet risen to a level where homes are
over-priced. “These more positive views
of the housing market may help foster a situation in which home buying activity
increases and home values continue to rise over the next year,” the Gallup