A new survey from Zillow.com shows that Americans are overconfident and in denial about the reality of the value of their homes. 62% of those surveyed said that they thought their homes had appreciated in value over the past year. The reality is, however, that only 19% of US homes increased in value, and 77% decreased in value. Just 5% stayed the same.

According to Stan Humphreies, VP of data and analytics and Zillow, said that the gap between what consumers believe their homes are worth and the actual values is due to "a combination of inattention and a fair bit of denial that causes people to believe their home is insulated from the woes of the market that affect others, but not them."

The survey also showed that 90% of homeowners report that foreclosures have already occurred in their local market.

Humphries continued, “Although many homeowners may believe the worst is over, we think this level of optimism is out of sync with actual market performance."