U.S. Census numbers show that in the U.S. and in Minnesota, median home values increased slightly between 2006 and 2007.
That may seem a bit odd, considering the widely-reported troubles in the housing market over the last few years.
So, just what are these numbers based on?
According to census bureau researcher Jeanne Woodward, "It's the respondents' best guess of what his house would sell for if it were on the market."
The census bureau does collect hard numbers on home values but in this survey, Woodward says there's value in asking people what they think their homes are worth.
And Woodward says, this survey has shed some light on the nature of the gap between homeowners' perceptions of the housing market crisis and the reality.
"It takes a while for the reality to set in with most homeowners," Woodward said. "Probably in 2007, most of us were still anticipating increases in home values and it has tapered off. You can't go to a block and not see that it takes longer for a house to sell."
Here are some numbers to illustrate the reality gap.
According to an earlier American Community Survey, in 2006 the median home value in Minneapolis was $230,300. The Minneapolis Association of Realtors - which tracks actual sale prices of homes - put that number at about $7,000 less.
“We tend to be over-confident with our own situations.”Ross Levin
Certified financial planner Ross Levin, president and founder of Accredited Investors, Inc. in Edina, says something very human can affect these numbers.
"One of the factors is that we tend to be over-confident with our own situations," Levin said.
He says that over confidence may be caused by a couple of factors.
Homeowners may have deeply internalized the conventional wisdom which says home values always go up.
Levin says this is one way homeowners fill in the gaps of what they don't know about what their home is actually worth. He calls this behavioral finance.
"One of the key components of behavioral finance is anchoring," Levin said. "So if you think your home is worth $350,000, even though the evidence shows you that there's no homes in your area that are selling for that, you might actually stick with that price for a very long time."
If homeowners were over confident in 2006, in 2007 they apparently saw the writing on the wall and lowered their expectations.
In fact, Minneapolis homeowners estimated that their homes were worth $20,000 less than the value determined by sales data.
Levin says this may be an example of another component of behavioral finance - one which he calls the recency effect.
That's when people believe that what has happened most recently - in this case with home values - will be the case in the long term.
"The net result of all of this is that people move to extremes," Levin said. "So they're either too optimistic or too pessimisstic - without really looking at their situation head on and saying, this is what's going on."
The census data includes what's been going on in eight Minnesota cities, Bloomington, Brooklyn Park, Duluth, Minneapolis, Plymouth, Rochester, St. Cloud and St. Paul.
Homeowners in just three of the cities, Brooklyn Park, Plymouth and St. Cloud, believed their homes went down in value between 2006 and 2007.
That means in more than half of the communities, homeowners felt like the housing market crisis hadn't reached them -- yet.