First stage of real estate grief

An optimistic survey finding came over my email transom today, saying 55 percent of Americans believe their home would sell for more today than it would have last year.

My first reaction to this: denial.

Existing US home sales declined 10.7 percent in April compared to a year ago, but prices fell less than 1 percent. That may indicate the worst isn't over yet, because house prices are slow to respond to a drop in demand. With interest rates and inventories of homes for sale on the rise, the near-term prospects are hardly rosy.

Homesellers in the Boston area entered the downturn in early 2006 -- ahead of the rest of the country -- and have already experienced denial, the first stage of real estate market grief. The local market may be moving into the final stage, acceptance of lower prices.

Everyone else is catching up. The survey of 1,007 homeowners, conducted by The Boston Consulting Group, also found that three-fourths of Americans are confident they could sell their home within six months "at a price they think it's worth."

Here's a more plausible finding: 85 percent think the house will worth more in five years.