Polling Homeowners (they do not have a clue)
Jonathan Miller's blog Matrix ("Interpreting the Real Estate Economy") has an interesting post (Consumer Reality Distortion, Or Is It?) outlining a recent WSJ poll on US Homeowners' perspectives and attitudes.
In particular, Miller noted that:
Only 10% of homeowners polled said they believe that rising real-estate values had affected their spending.
85% of homeowners surveyed said they had experienced real-estate gains in the past three years
70% saw gains of more than 10% in the past three years
50% had extracted funds through home equity loans
60% expect home values to rise at least 5% annualy for the next 3 years.
3% expect home values to fall over the next 3 years.
60% said rising energy costs were causing them to reign in spending.
Its fair to observe (as a commentor did at Matrix) that "only 10% said their spending had increased with the value of real estate, yet 50% had taken out loans against their equity. Is there a contradiction here?"
That's more than a contradiction; Its the entire underlying premise for why I believe a) Real Estate has been the key driver to the US economy; and 2) why so many people -- professionals included -- do not have a firm grasp on the underlying economy.
Any subsequent "retracement" will simply catch a majority quite unaware.
Its is all too true: Most people know not their own minds, including their biases and beliefs, their predelictions and prejudices . . .
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Source:
Poll Finds Homeowners Expect Gains to Continue
TARA SIEGEL BERNARD
DOW JONES NEWSWIRES, September 29, 2005; Page D2
http://online.wsj.com/article/SB112795239565355293.html
Monday, October 03, 2005 | 06:37 AM | Permalink
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Barry Ritholtz says that homeowners don't have a clue: The Big Picture: Polling Homeowners (they do not have a clue): Jonathan Miller's blog Matrix ("Interpreting the Real Estate Economy") has an interesting post (Consumer Reality Distortion, Or Is It?... [Read More]
Tracked on Oct 5, 2005 5:29:31 PM
» Consumer Reality Distortion, Or Is It? from Matrix
A survey [WSJ] by Royal Bank of Canadas RBC Capital Markets unit of 1001 consumers found that most owners think their homes will continue to appreciate and the housing boom has not affected their spending patterns.
The results of this surv... [Read More]
Tracked on Oct 24, 2005 10:57:55 PM
Comments
Only 3% think prices will fall? That's such an absurdly low figure it makes me question the methodology. There's got to be more than 3% of the homeowning population who are at least slightly pessimistic about the future.
Posted by: royce | Oct 3, 2005 8:29:22 AM
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