More Faith in Rising Prices

Posted by Dave Fratello on Friday, June 22nd, 2007 at 8:43pm.

Nationally, more than half of all Americans think they can sell their home now for more than they could have fetched last year.

The LA Times reports:
  • 55% of Americans believed they could sell their house for more now than a year ago, down slightly from the 59% who felt that way last summer; and
  • Nearly three-quarters think they could sell their homes within the next six months at a price they set.
This survey is courtesy of the Boston Consulting Group (BCG). In April, the LA Times ran its own poll showing even greater real estate bullishness among average Americans. As MBC distilled the Times' findings:
  • 83% believe that home values in their neighborhoods will remain the same or increase over the next six months; and
  • [M]ost of the no-decrease folks (51% of the 83% total) are just expecting flat values.
Back to today's news, the BCG survey (click here for the entire press release) also tells us:
  • Most Americans (52%) believe the residential real estate slump will last two years or less.
  • Only 22% believe it will last for five or more years.
  • 85% of Americans believe their house will be worth more five years from now than it is today.
The masses may well be right. We don't have much survey data from the doldrums of real estate down-cycles in the past, so it's hard to say whether such cycles began with such a broad mix of optimistic sentiments before everyone got depressed.

There are at least two sellers in MB who seem to take this bullishness to heart.
  • 404 10th St., a pretty new, sharp, Lazar-built home on a walkstreet (see picture). The sellers paid $2.5m on April 13, 2006. They listed it for $3.2m on February 25, and then raised the price to $3.3m a day later. They have faith that the home's value rose since last year. (Or that they got a steal of a deal last April.)
Unlike your average American answering a telephone survey, these folks have to convince someone they're right about the state of the market. So far, they haven't been too compelling.
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