Americans too optimistic about recovery, Trulia reports

Americans are feeling more positive about the direction
of the housing market, and a new survey conducted by
Trulia suggests that they may actually be getting too
optimistic with their expectations recently.

Fifty-eight percent of more than 2,000 adults surveyed
say they believe their local home prices will return to
previous housing bubble-level peaks within the next 10
years, according to Trulia’s latest American Dream survey.
This holds true for even hard-hit metro areas that saw
home prices plummet, such as Detroit and Las Vegas.

“In metros where prices skyrocketed during the bubble
and then plummeted, today’s prices are a lot closer to
‘normal’ than those bubble highs were,” said Jed Kolko,
Trulia’s chief economist, about the survey’s findings.
“Perhaps residents in metros with huge price drops are
encouraged by all of the search activity in those areas:
Far more searchers [on Trulia] are looking for homes in
places that had bigger price declines than the other way
around.”

The survey found that Americans also are looking for
bigger homes, possibly reversing a downsizing trend that
had taken hold over the past few years. Twenty-seven
percent of those surveyed say their ideal home size is
more than 2,600 square feet, which is up from 17 percent
in 2011. What’s more, 11 percent of those surveyed say
they want a home that is 3,200 square feet or more,
compared to 6 percent who said that last year.

While Americans say they want a bigger home, they may
have a tough time getting one. According to the survey,
the majority of the inventory of existing homes for-sale
is smaller than what most people say their ideal home size
is.

Besides supersizing their homes, those surveyed also
showed an increased appetite for amenities. Here’s what
they reported wanting the most:

63 percent want a master bathroom
56 percent want a walk-in closet
50 percent want a gourmet kitchen

Those who want to buy a home say what’s holding them
back is getting enough money for a down payment and poor
credit history. About one-fourth expressed doubts over
whether they could even qualify for a mortgage today.

So “while some optimism is necessary for the housing
market to recover, the pendulum may have swung a little
too far,” Kolko wrote about the survey. “Too much optimism
would get us back to a bubble.”