Barry Ritholtz says that homeowners don't have a clue:
The Big Picture: Polling Homeowners (they do not have a clue): Jonathan Miller's blog Matrix ("Interpreting the Real Estate Economy") has an interesting post (Consumer Reality Distortion, Or Is It?) outlining a recent WSJ poll on US Homeowners' perspectives and attitudes. In particular, Miller noted that:
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.
Its is all too true: Most people know not their own minds, including their biases and beliefs, their predelictions and prejudices . . .