You know there's a disconnect between home sellers and real estate agents when 94 percent of agents think that their clients' homes have dipped in value in the last year while only 54 percent of owners think the same thing.
This disconnect is alive and well here in Chicago and Illinois. Those figures listed above summarize the view of Illinois home sellers and real estate agents, according to the 2010 second quarter home prices survey from HomeGain.
It's not surprising that homeowners aren't quite as pessimistic about the value of their homes. It's called wishful thinking; homeowners understand that their neighbors' home values have fallen. They just aren't so sure that theirs have done the same thing.
Louis Cammarosano, general manager with HomeGain, isn't surprised by the results. He's a realist when it comes to the housing market, though. When it comes to depreciating home values, he thinks the real estate agents are right.
"Homeowners had gotten used to the value of their homes going up," Cammarosano said during a phone interview. "They have a vested interest in this happening. They don't want to accept the reality that the Realtor already understands. The agents have been selling homes in this market. They know what homes are going for today. They have a sense of realism that the buyers haven't caught up to yet."
There's a sizable disconnect, too, when it comes to the percentage of sellers and agents who believe that home values will increase in the next six months. Only 3 percent of Illinois agents surveyed said that they thought the value of their clients' homes would rise in the next six months. A total of 27 percent of homeowners in Illinois, though, said that they thought the value of their homes would increase during the same time.
Again, Cammarosano told me that he's on the side of the real estate agents here. It's just a rough residential real estate market for housing values. We see this in Chicago: Housing prices in the city have been increasing this year. But values are still way down from where they stood during the housing boom years.
The thing is, housing prices were getting too expensive. That's how it felt to me in Chicago. And Cammarosano mentioned that as pricey as homes seemed here, they were truly outrageous in San Francisco and other markets.
This correction is certainly a painful one. But it might also have been a necessary one.
Now it's time for sellers to open their eyes to just how far housing values have fallen since the recession hit.