Delusional AND Idiotic

I know that during the Bush years, it's become fashionable to believe what we WANT to be true, rather than what IS true; things like that Iraq really DID have weapons of mass destruction, and that America still IS the greatest country in the world, and that we still ARE #1, and our health care system IS the best in the world.

And that while the value of our neighbors' homes may be dropping, OUR home is holding its value.

Every now and then I receive an e-mail blast from MarketWatch. This was in today's:

The housing downturn has been under way for a while now, so it's hard to
believe that many homeowners could still think their homes are appreciating these days.

Yet a recent survey from Zillow.com found that 62% of homeowners believe their home's value has increased or stayed the same in the past year. They can't all be right: According to Zillow, 77% of homes in the United States actually declined in value during the same time.

"Our survey reveals a wide gap between the perception homeowners have about their own home's value and the realities of a market in which three-quarters of homes declined in value in the past year," said Dr. Stan Humphries, Zillow vice president of data and analytics, in a statement. "We attribute this gap to a combination of inattention and a fair bit of denial that causes people to believe their home is insulated from the woes of the market that affect others, but not them."

In the survey of 1,361 homeowners, three out of four expect their home value will increase or stay the same in the next six months, yet 42% expect values in their neighborhood to drop. Four out of five homeowners expect the amount of foreclosures will increase or stay the same in the next six months, compared with the last six months.

Read more real-estate news in this week's pages, including why it's a good idea to negotiate on commission with your real-estate agent as well as the latest pending home-sales numbers.

A year ago, it might have been understandable for people to be in denial about housing-market realities. These days, to assume your home is somehow immune isn't very realistic -- and potentially problematic if you're planning on selling soon.

-- Amy Hoak, real-estate writer

My house was (accurately, I think) assessed for taxes at a market value of over $450,000 in 2007, based on late 2006 prices. Right now, there about four of the slightly smaller version of my house on the market in my neighborhood. One of them has had nothing done to update it whatsoever and is sitting at $418K, because the owner seems to think that a 100' wide lot on a main street somehow mitigates a house where nothing has been updated and the concrete steps and patio in the back are crumbling. The others are in various states of updating and all are sitting, unsold, at $399K. In the twelve years we've lived in this house, we've replaced the furnace, upgraded the electric service, replaced all but the basement windows, put on a new roof with improved ventilation, new gutters, and new siding. We just had the front steps repaired. Last year we put new carpet in the basement after a flood. We put in a new toilet, vanity, and floor in the upstairs bathroom. But the back steps are starting to go, the kitchen still needs updating, and we're still living with the previous owners' red carpeting in the living room. If I were sitting here thinking that while all these houses are sitting, MINE is somehow special and I could still get over $450,000 for it, it would make sense to cart me off to the nearest psych ward. And yet, all over the country, homeowners who don't want to admit that their homes aren't worth what they were two years ago are thinking that if they really, really, really believe in fairies, they can make Tinkerbell live.