Historically, home values in a normal market appreciate by 2-5 percent a year. And during the last five years, home prices have been extremely volatile with many homeowners having upside-down mortgages, owing more on the house than its current valuation.
Zillow uncovers where homebuyers are confused.
• 41 percent think they are required to buy private mortgage insurance (PMI) regardless of their down payment. PMI is typically required only when buyers put down less than 20 percent.
• 56 percent confuse appraisals and inspections, with most believing that appraisals determine whether or not a home is in good condition.
• 37 percent believe that homeowner's insurance is optional and do not budget it into their monthly payments. In reality, lenders require that borrowers purchase homeowner's insurance that protects the lender more than the home buyer.
"It's troubling that we're still in the midst of one of the worst housing recessions in history," said Dr. Stan Humphries, chief economist at Zillow. "And yet, prospective buyers continue to have such high expectations for home value appreciation."
Upbeat about home appreciation, but downbeat on the economy.
According to another poll, this one conducted by Harris Interactive, 67 percent of Americans rate the job market as bad in their region of the nation. Only nine percent would rate it as good.
Currently, Southerners seem to be more optimistic (62 percent say the economy is bad) and Westerners less optimistic (74 percent say the economy is bad). When asked what would help increase jobs in the United States, 44 percent said cutting government spending and 40 percent said cutting taxes for Americans.
Only 12 percent believe more government spending would increase jobs. While Harris noted some partisan differences, only 29 percent of Democrats believe that more government spending will increase jobs. Almost 22 percent of respondents said nothing will increase jobs.
Retailers are not convinced there will be an economic recovery either. The Journal of Commerce/PIERS reported that toy imports were cut nine percent, which indicates that retailers are being especially cautious. Most toy imports (82 percent) come from China.
What marketers and employers could do to step up.
A few weeks ago, we alluded that the best economic recovery could be spurred by a new concept of economy. Customers are looking for more meaningful purchases (quality over quantity) and stable working conditions (protective sentiment). This may require companies to consider strategies that strengthen internal communication (employee morale) and honest, up front communication and customer service (external communication).
The worst moves that companies can make are sweeping changes or over promising and under delivering. Consumers and employees are not in the mood, and their level of frustration is likely to materialize in national protests or public relations nightmares for companies that raise fees or implement sweeping service changes (unless they are truly looking out for the consumer).