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Wake Up America—Home Prices ARE Falling

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Photo by:Seven_Null7
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Am I not doing my job? Or is nobody listening? How is it possible, in the midst of the worst credit crisis in history, which is predicated on one of the biggest housing crashes in history, that nearly half of all Americans still don’t get that home prices are falling?

A new survey from Zillow.com finds that a full 49 percent of those surveyed think their home has either retained its value or even gained value in the past year. According to Zillow, 74 percent of all U.S. homes have lost value in the last year. Don’t believe Zillow? How about the National Association of Realtors: Home prices down 9 percent nationwide in the past year. How about the government’s Office of Federal Housing Enterprise Oversight: Home Prices down 5.9 percent since last year. How about any real estate agent in the phone book??

Ok, I get it, all real estate is local, and a lot of folks simply believe that those national numbers don’t apply to their neighborhood. Yep, there’s some truth to that, there are some neighborhoods in some cities that are still strong. But not half the homes in the country!!!

Who’s most deluded? Many of you folks in the Northeast. Apparently about 55 percent of you think your home would sell for the same or more than it would a year ago. Zillow says 71 percent of homes in the Northeast have lost value. Thankfully Westerners are a little more grounded in their property valuations…but not all of you! Despite the fact that home prices in California, Nevada and Arizona have fallen upwards of 40 percent regionally, 35 percent of Westerners think they haven’t lost a dime in their homes. According to Zillow, 85 percent of all homes in the West have lost value.

  • Home Prices Plunge 16.6% in August
  • New-Home Sales Fall Again in August
  • Banks Reluctant to Redo Ailing Mortgages
  • So what’s up with the numbers? Clearly Americans get that something bad in the economy is going on. Consumer sentiment is in the toilet and consumer spending is swirling around the same venue. Are we all so wrapped up in the credit crisis and the stock market mayhem that we forgot from whence all this madness was born, i.e. housing??

    Look, I’m all for optimism, and yes, I do think the media can tend to go a bit overboard in reporting a crisis, but all indicators suggest we are in a housing crisis. Anyone has a right to think anything they want about their home, but any real estate agent will tell you, one of the biggest barriers to home sales and a housing recovery is the seller’s over-inflated perception of the home price.

      • Mortgage Applications Bounce from 8-Year Low

    Price a home correctly, even aggressively, in today’s market and it will sell, and that’s the road to recovery my friends, not listing your home for sale right in the heart of la la land.

    Questions? Comments? RealtyCheck@cnbc.com

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    • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.

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