From the AP:
Pew Poll: U.S. Homeowners Optimistic
Recent broad declines in prices have slightly dented the outlook of U.S. homeowners, as a new poll published Wednesday shows they remain mostly optimistic about the value of their property.
A nationwide poll conducted by the Pew Research Center between October and November showed that more than eight in ten homeowners expect the value of their homes to go up either “a little” (55 percent) or “a lot” (26 percent) in the future.
…
The results of the Pew poll that involved 2,000 interviews also show that homeowners are paying attention to the latest news: Despite continued optimism, expectations have been tempered by the marked slowdown in the housing market.Median home prices have tumbled in the last year and the latest indicator, an index of pending home sales in October released Monday, showed continued weakness in the sector, with an eighth decline in the year.
…
Respondents have toned down the expected rate of gains from a potential sale of their homes compared with past years.But in the face of the very gloomy scenarios about the bursting of the housing bubble in the United States, the Pew poll found that for the most part homeowners aren’t panicking over the market’s softening.
“As if to underscore that point, homeowners also report that they’ve largely taken in stride the recent runup in the value of their home. Only about a quarter say it has had some or a great deal of effect on their personal finances, while three-quarters say it has little or no effect,” according to the Pew survey.
The poll found the degree of optimism is determined by location as well as the value of homes. Residents of the country’s coasts feel better about the value of their homes than respondents living in the mid-section of the United States.
The Pew survey found that among those who say their home is currently worth $500,000 or more, about 68 percent say their home value has risen “a lot” in the past few years. Only 34 percent of homeowners whose house is worth less than $250,000 say the same thing, however.
The survey also found that 75 percent of all homeowners say they are currently paying a mortgage, with one in five carrying either a second mortgage or a home equity loan. That percentage rises to 28 percent among younger homeowners in the 30 to 49 age bracket.
The survey shows that 24 percent of all homeowners said they owned a second home or an investment property.
“…with one in five carrying either a second mortgage or a home equity loan. That percentage rises to 28 percent among younger homeowners in the 30 to 49 age bracket.”
so over 1/4 of 30-49 have 2 mortgages. nuts.
There was a time when buying a house didn’t mean spending all your savings and selling your future to a bank. Not anymore, I suppose.
Crazy what people would do to become *Home Owners*. It’s putting all your eggs in one basket.
“Respondents have toned down the expected rate of gains from a potential sale of their homes compared with past years.”
So what does this mean???? They have adjusted their expectations downward, instead of 20% annual gains, they now expect 10% annually??? Reading this, it is apparent to me that the market is still in the complacent stage.
The survey shows that 24 percent of all homeowners said they owned a second home or an investment property.
That’s not all the survey showed. The survey also showed that 8 in 10 homeowners haven’t got a clue or are willfully deluding themselves.
Crazy what people would do to become *Home Owners*. It’s putting all your eggs in one basket.
Has it not always been this way? My parents had to struggle at first to purchase a house. My father had to work 2 jobs and my mother worked full time as well. In fact, everybody I know had to struggle at first to buy a home. It is not easy when you are first starting out, but if you work hard you can accomplish anything. I think we can all agree that people save their money primarily to do two things:
1. Buy a house
2. Retire
The survey also found that 75 percent of all homeowners say they are currently paying a mortgage, with one in five carrying either a second mortgage or a home equity loan. That percentage rises to 28 percent among younger homeowners in the 30 to 49 age bracket.
In Monmouth/Ocean the ratio of homeowners with a second mortgage/Heloc is closer to 1 in 3, according the the Census Bureau’s 2005 ACS.
If I have time I’ll check the NNJ counties later.
“My parents had to struggle at first to purchase a house.”
As did mine. But they never overextended themselves or had two mortgages. Nor did they purchase a home that was beyond their means.
Would they have used an ARM if it was available back then? I don’t know. But I feel they were lucky it wasn’t available.
I forgot to mention myself as well! When first starting out I saved the 20% and bought a home that was within my means. I sitll had savings and contributed heavly to that new retirement concept called a “401k”.
Was it a struggle? Sometimes.
But did I overextened myself like many today? No.
Rich
most people don’t have a clue folks. use that to your advantage instead of calling them stupid. don’t fight the trend regardless of the reason.
Its true, there are still people out there who have no idea that the party is over, and that prices are deopping.
When you talk abou it, they think you are crazy.
“…we can all agree that people save their money primarily to do two things:
1. Buy a house
2. Retire ”
I’m not so sure about the relationship between savings and homeownership anymore, considering negative savings in this country plotted against the increase in homeownership, and the fact that most Americans have very little, if anything saved for retirement.
The pride of saving, and expressing the value of those savings through a home purchase, has been reduced to a farce by lending practices. If people are not saving, can’t we assume they do not attach the same value to saving, and by default to homeownership?
In addition, in my opinion, the societal impact of two-wage earner households has been a driving force in this trend. Who values a home when they spend little to no time there, and they are working primarily to foot the bill for that lifestyle? Many full-time working mothers/wives I know express nothing but disgust and frustration at their situations.
This is silly as it doesn’t take into account regional veriations. Not all areas bubbled the same way. For instance:
“The Pew survey found that among those who say their home is currently worth $500,000 or more, about 68 percent say their home value has risen “a lot” in the past few years. Only 34 percent of homeowners whose house is worth less than $250,000 say the same thing, however.”
Of course the majority of $500,000 houses are on the bubblicious coasts and the majority of $250k houses are in the middle of the country where prices haven’t risen so much.
“My parents had to struggle at first to purchase a house.”
Mine too, but they did it the “right” way. They struggled to save 20% down. When they had their 20%, they took on a 30 year fixed mortgage. They struggled in the beginning, but were conservative with their money and still managed to put a little extra away for a rainy day even when paying their mortgage. They had very average incomes and bought a nice, but very average, house. And, they did it all at 22 years old.
Today, this scenario would be almost impossible. How many regular 22 year olds with regular incomes could possible save $100k for a 20% down payment for the average $500k house? Never mind the fact that the cost of living (property taxes, auto insurance etc. have outpaced income growth).
My parents would not be able to do the same thing today.
These survey result are consistent with other results I have seen. People tend to believe there is a housing bubble somewhere else, but generally don’t believe it applies top them.
The RE industry has done a very effective job of “divide and conquer. Since its almost impossible to refute the existence of a bubble, they have taken more action at the local level. It’s the “it’s different here” approach.
I would love to call Realtors® across the country, tell then I am thinking of buying in their location, but I’m afraid of this housing bubble I have been hearing so much about. I would bet that each location has a reason why a bubble doesn’t apply to them.
My parents did the same thing yet went one better. When they were moving from house #2 to house #3, they were able to keep house #2 (in a much less expensive area – Mount Holly) to rent out as an investment. They kept it for 11 years after moving. Then they did the same thing when moving from house #3 to house #4 and also kept it for 11 years before selling it to the tenants in 1989. This was all done on my father’s teacher’s salary with a littl help when buying house #3 from my grandmother (but that was paid back asap).
Could I even hope to do that? No way!
BC Bob Says:
December 7th, 2006 at 8:14 am
“Respondents have toned down the expected rate of gains from a potential sale of their homes compared with past years.”
So what does this mean???? They have adjusted their expectations downward, instead of 20% annual gains, they now expect 10% annually??? Reading this, it is apparent to me that the market is still in the complacent stage.
READ MY LIPS: SPRING 2007 HOUSING MASSACRE COMING TO A HOOD NEAR YOU.
This bunch thinks they are entitled to 10% annually?
HAHAHHAHAHAHAHAHAHAHAHAHAHA
Look I am expecting about a 25-30% haircut from peak 2005 prices taking us down to about 2002 prices but if this complaceny continues I will step that up to -40% on HOUSES NOT Condoshacks. Condos will be a complete disaster.
Never seen so many call for a bottom in housing. READ MY LIPS THERE IS NO BOTTOM ON HOUSING YET!
Houses back 30 years ago went for 2-2.5 times incomes.
Buyers need to look in the mirror they bought the bloated house.
Looking forward to many buyers who did not have chimp change to buy a house kicked out on the street so those that saved and sacrificed are rewarded to buy a house at a reasonable price, not these phoney fantasy prices.
Any dummy buyers out their…just want to let you know you are UNDERWATER NOW!
BOOOOOOOOOOOOYAAAAAAAAAAA
Bob
Houses back 30 years ago went for 2-2.5 times incomes.
Buyers need to look in the mirror they bought the bloated house.
Looking forward to many buyers who did not have chimp change to buy a house kicked out on the street so those that saved and sacrificed are rewarded to buy a house at a reasonable price, not these phoney fantasy prices.
Any dummy buyers out there…just want to let you know you are UNDERWATER NOW!
BOOOOOOOOOOOOYAAAAAAAAAAA
Bob
http://www.truthout.org/docs_2006/120506S.shtml