It's another look backwards, but the new Zillow Home Value Report for Q-4-2007 has some interesting things to say.

It's the first of it's kind that tracks values, not sales, pendings or listings. Using both homeowner equity and negative equity data, the Zillow report covers the nation through 125 metro markets, or 67 million homes.

The Q4 2007 report found that home values fell over three percent (3.3 percent) from Q3, and 3 percent year-over-year for all homes. Condos and single-family residences experienced the most significant value declines of 7.4 percent and 5.5 percent respectively, which contradicts the National Association of Realtors sales figures.

The NAR found that condos sales for all of 2007 fell 11.0 percent to 713,000 units, and single-family home sales fell 13.0 percent to 4.94 million.

That raises an interesting question -- are homeowners being realistic about the value of their homes?

Zillow says no. Many U.S. homeowners saw equity slip while other homeowners found themselves owing more on their mortgage than the home is currently worth. Nationwide, those at most risk of being underwater on their mortgage are those who bought in the last two years when most markets peaked. Of those who bought in 2006, 39 percent now have negative home equity as do 30 percent of those who purchased in 2007. By comparison, only 3 percent of those who purchased five years ago, in 2003, and less than one percent of all homes in the U.S., regardless of when they were purchased, have negative equity.

Yet, when Zillow did a survey, the online community found an incredible level of homeowner optimism or denial, depending on whether you're a glass half full or empty kind of person.

A whopping 77 percent of participating homeowners across the country believe the value of their home has increased or remained the same in 2007.

And they plan to act on their beliefs. In 2008, homeowners said they plan minor (82 percent) to major (67 percent) remodeling, take out a home equity loan (35 percent) refinance or take out a second mortgage (36 percent) or sell their homes (34 percent.)

By then, low mortgage interest rates below 6 percent, the economic stimulus package, and pent-up demand from reluctant homebuyers may justify homeowners' sunny outlook.

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