From ‘Big Picture’:
CLUELESS HOMEOWNERS
* Only 10% of homeowners polled said they believe that rising real-estate values had affected their spending.
* 85% of homeowners surveyed said they had experienced real-estate gains in the past three years.
* 70% saw gains of more than 10% in the past three years.
* 50% had extracted funds through home equity loans.
* 60% expect home values to rise at least 5% annualy for the next 3 years.
* 3% expect home values to fall over the next 3 years.
* 60% said rising energy costs were causing them to reign in spending
Its fair to observe (as a commentor did at Matrix) that "only 10% said their spending had increased with the value of real estate, yet 50% had taken out loans against their equity. Is there a contradiction here?"
That's more than a contradiction; Its the entire underlying premise for why I believe a) Real Estate has been the key driver to the US economy; and 2) why so many people -- professionals included -- do not have a firm grasp on the underlying economy.
Any subsequent "retracement" will simply catch a majority quite unaware.
http://bigpicture.typepad.com/commen...g_homeown.html
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