Is it possible that home owners think their homes are worth more than they actually are? Yep:
When the Lake Wobegon Effect Extends to Our Homes
Dan Ariely, professor of behavioral economics at Duke University and author of Predictably Irrational, a book about why people make irrational decisions. Dan had an interesting take on the results.
“It’s the Lake Wobegon Effect, extended to homes,” he said. (The Lake Wobegon Effect is the tendency of humans to evaluate themselves as better than average).
“We tend to fall in love with what we have,” Dan said.
I suppose the Lake Wobegon Effect may be more common in down markets where people try to live in denial.