But optimism varies dramatically by region

Affluent Americans remain exceptionally optimistic that their home values will increase over the near term, but regional differences in opinion highlight the precarious nature of todayÕs real estate market, according to a new survey from PNC Financial Services Group.
Overall, 65 percent of respondents expect to enjoy double-digit increases in the value of their primary residence over the next five years. Nearly one in three (31 percent) foresee an increase of 20 percent or more. Only 7 percent anticipate any decline in value over that time.

But such optimism varies widely across the United States. Those in the Northeast appear most cautious. In New England, only 10 percent expect their home values to increase by at least 20 percent, while 18 percent foresee a decline in values. Nearly one in five homeowners in New York expect values to increase by 20 percent or more, while a larger group (20 percent) anticipates a drop.

Pollyannas rule in sunnier climes. In California, nearly 40 percent of respondents presume values will increase by at least 20 percent, while only 8 percent predict any decline. Likewise, in Florida, fully half of respondents expect their property values will rise by 20 percent or more.

PNC's survey also indicates that deflation in housing values may not markedly affect spending. Only 22 percent of respondents reported that they would change their lifestyle to reduce spending should housing prices fall in the near term. Fifty-five percent admitted that they would not delay large purchases.

Last month, a Bloomberg/Los Angeles Times poll of private investors found that nearly 70 percent of affluent homeowners expect the value of their property to rise over the next three years by somewhere between 5 percent and 30 percent.