Americans are feeling more positive about the direction of the housing market, and a new survey conducted by Trulia suggests that they may actually be getting too optimistic with their expectations recently. 

Fifty-eight percent of more than 2,000 adults surveyed say they believe their local home prices will return to previous housing bubble-level peaks within the next 10 years, according to Trulia’s latest American Dream survey. This holds true for even hard-hit metro areas that saw home prices plummet, such as Detroit and Las Vegas. 

“In metros where prices skyrocketed during the bubble and then plummeted, today’s prices are a lot closer to ‘normal’ than those bubble highs were,” notes Jed Kolko, Trulia’s chief economist, about the survey’s findings. “Perhaps residents in metros with huge price drops are encouraged by all of the search activity in those areas: Far more searchers [on Trulia] are looking for homes in places that had bigger price declines than the other way around.”

The survey found that Americans also are looking for bigger homes, possibly reversing a downsizing trend that had taken hold over the past few years. Twenty-seven percent of those surveyed say their ideal home size is more than 2,600 square feet, which is up from 17 percent in 2011. What’s more, 11 percent of those surveyed say they want a home that is 3,200 square feet or more, compared to 6 percent who said that last year. 

While Americans say they want a bigger home, they may have a tough time getting one. According to the survey, the majority of the inventory of existing homes for-sale is smaller than what most people say their ideal home size is. 

Besides supersizing their homes, those surveyed also showed an increased appetite for amenities. Here’s what they reported wanting the most: 

• 63 percent want a master bathroom
• 56 percent want a walk-in closet
• 50 percent want a gourmet kitchen

Those who want to buy a home say what’s holding them back is getting enough money for a down payment and poor credit history. About one-fourth expressed doubts over whether they could even qualify for a mortgage today.  

So “while some optimism is necessary for the housing market to recover, the pendulum may have swung a little too far,” Kolko writes about the survey. “Too much optimism would get us back to a bubble.”

Source: “Consumer Optimism: Too Much of a Good Thing?” Trulia (June 20, 2012)