Homeowners steeped in denial about house prices?

The Los Angeles Times conducted a nationwide poll of 2,563 homeowners in cooperation with Bloomberg Financial at the end of February and found that nearly half think that the price of their primary residence will increase by 5% to 15% over the next three years.

One quarter expect price increases above 15%! Only 5% saw prices staying flat.

This is in spite of the fact that the median price of existing homes sold in January 2006 was $211,000, which is down significantly from the record high of $220,000 recorded last August.

Respondents were optimistic even when looking at the short term, with more than one third saying they expected their house to increase in price in the next six months.

This reminds us of the Republican Congressman who said, during the famous Watergate scandal that brought down Richard Nixon: “Don’t bother me with the facts, my mind is made up!”

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