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A new survey out today from Reuters/University of Michigan looks at homeowners’ perceptions of their own homes’ values. When the survey flashed over the wires this morning, my email lit up with all the “Alert” desk folks at CNBC saying, “Omigod, this is huge.” I don’t agree. I say it’s not huge enough.

The survey’s headline says, “A record 26% of U.S. homeowners say the value of their homes has fallen during the past year.” Further, 21% of homeowners polled in September expect the value of their home to decline in the year ahead. The survey finds even bigger numbers if you look at folks just in the West, but that’s an overall national picture.

Ok, so 26% is a record, but I have to ask, why isn’t it higher?? The latest survey from S&P/Case Shiller, which looks at the nation’s top 20 metros as well as a full U.S. National index, shows nothing but negative now, and given the trend, into the near future. The national index shows a price drop of 3.2% from a year ago, with the 10-city composite down 4.1% and the 20-city composite down 3.5% from a year ago.

So why do 74% of American’s not get it? Look, I know I’m always whining on TV that all real estate is local, and we should be careful with these big national figures, because there are always exceptions in certain local markets. Seattle and Portland for example, are doing quite well, but even their price growth is slowing. When I look at the 20 largest cities in America, only five of them are in the positive year-over-year.

With all the trouble in the credit markets, continued adjustable-rate mortgage resets, and rising foreclosures, not to mention continued sky-high inventories, what exactly makes ¾ of Americans think they’re going to make big bucks on their homes this year??

This is precisely why homes aren’t selling. Sellers are stubborn; they just don’t get it. Prices during the boom were unsustainable, affordability is now ridiculous, and continued price appreciation makes no economic sense in the current atmosphere. The boom-time price inflation in homes was thanks to a faulty mortgage system, which is now in the process of righting itself, and home prices rightfully have to fall in line. Do I like writing those words? Hell no! I own a home. I like money. I also like logic. Sue me.

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