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Your home is worth 10% less than you think it is

Started by Riversider
over 15 years ago
Posts: 13572
Member since: Apr 2009
Discussion about
Self-reported home values are widely used as a measure of housing wealth by researchers employing a variety of data sets and studying a number of different individual and householdlevel decisions. The accuracy of this measure is an open empirical question, and requires some type of market assessment of the values reported. In this study, we examine the predictive power of self-reported housing wealth when estimating housing prices, utilizing the portion of the University of Michigan’s Health and Retirement Study covering 1992–2006. We find that homeowners, on average, overestimate the value of their properties by between 5% and 10%. http://www.levyinstitute.org/pubs/wp_571.pdf
Response by mutombonyc
over 15 years ago
Posts: 2468
Member since: Dec 2008

Aim high!

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Response by Sunday
over 15 years ago
Posts: 1607
Member since: Sep 2009

What's next? A study that shows people think they are smarter than they think they are?

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Response by bob420
over 15 years ago
Posts: 581
Member since: Apr 2009

How come you didn't say 5%?

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Response by ekartash
over 15 years ago
Posts: 364
Member since: Jun 2007

Go blue!!!

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Response by somewhereelse
over 15 years ago
Posts: 7435
Member since: Oct 2009

zillow had this funny stat. it was a large percentage (I think more than 50%) of homeowners a year or two ago said their neighbors houses had gone down, but not their own.

same reason 80% of people think they are smarter than average

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Response by Riversider
over 15 years ago
Posts: 13572
Member since: Apr 2009

I'm sure my home is worth more than I think it is.

(that's a joke)

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Response by columbiacounty
over 15 years ago
Posts: 12708
Member since: Jan 2009

No..you are the joke.

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Response by RECraze
over 15 years ago
Posts: 53
Member since: Jun 2006

My home is worth more than I paid for it.

(that's not a joke)

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Response by sniper
over 15 years ago
Posts: 1069
Member since: Dec 2008

Your home will soon be worth 35% less than you think it is now:

http://www.theatlantic.com/business/archive/2010/08/home-prices-may-drop-another-25/62049/?source=patrick.net#toolsTop

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Response by Riversider
over 15 years ago
Posts: 13572
Member since: Apr 2009

My car is worth less than I paid for it several years ago too. But I got some use out of it, it works and it gets me where I need to go. It is interesting that the expectation of rising prices was so built into housing psychology.

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Response by sniper
over 15 years ago
Posts: 1069
Member since: Dec 2008

Yep. People have been duped into believing that homes are investments. They know better when it comes to cars.

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Response by somewhereelse
over 15 years ago
Posts: 7435
Member since: Oct 2009

> My home is worth more than I paid for it.

are you including all the interest?
the taxes? the maintenance?

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Response by Riversider
over 15 years ago
Posts: 13572
Member since: Apr 2009

and subtract from that the rent savings..

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Response by somewhereelse
over 15 years ago
Posts: 7435
Member since: Oct 2009

And you're still left with more... that should be factored into "cost".

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