Despite overwhelming evidence to the contrary, a majority of U.S. homeowners believe the value of their homes has either increased or remained the same in the last year, according to the results of a survey conducted by online real estate firm Zillow.

The survey found that 62 percent of homeowners have held this optimistic view of the value of their homes over the last year despite the fact that 77 percent of U.S. homes have actually declined in value in that period. Only 19 percent of homes actually increased in value, while 5 percent remained the same, according to Zillow.

Seattle based Zillow found the perception-versus-reality gap or misperception index as the company calls it to be highest in the South at 36 percent and lowest in the West at 23 percent.

Zillow attributes the misperception index to homeowner inattention and denial that the ongoing subprime mortgage crisis and the resulting foreclosures are having significant effect on the value of their homes.

Greg Sterling, an analyst with Sterling Market Intelligence, believes that there is indeed homeowner misperception about the value of their homes and that it could be understated by the fact that Zillow typically inflates the value of the homes it lists.

“It's kind of ironic that Zillow is the one talking about homeowners' optimism since they have historically overvalued homes, although they have gotten a little better recently,” Mr. Sterling said.

But Lawrence Yun, chief economist of the National Association of Realtors, a real estate trade group, said that Zillow's proprietary estimates are probably inflating the misperception index.

“Zillow's estimates have been found to be wrong by measurable amounts, so the homeowners' could be correct and Zillow's estimates could be off,” he said.

He asserted that the survey does not take into account the wide neighborhood to neighborhood variations in the market.

“Prices are falling steeply in neighborhoods with large exposure to subprime loans while neighborhoods with very little subprime loan exposure are doing fine,” Mr. Yun said.

The fact that only 9 percent of U.S. homes are exposed to the ravages of the subprime mortgage crisis means the other 91 percent could indeed be seeing far more stability in the value of their homes, he said.

Homeowners responding to Zillow's survey could be making longer-term assessments of the value of their homes that goes past Zillow's one year snapshot. Also, most homeowners are not selling their homes in the next year, and that affects their assessments.

“Their home values may be better now than two years ago so they see much of the current data as short-term statistical noise,” Mr. Yun said.

The Zillow survey actually found that homeowners' short-term outlook is even more bullish than current perception as three out of four homeowners, 75 percent, expect their homes' value to increase or stay the same over the next six months.