Zillow: US home values to drop about $681B in 2011

Annual loss is 35% less than in 2010

By Inman News, Thursday, December 22, 2011.

The value of overall homes nationwide has likely dropped just over $681 billion this year, according to property search and valuation site Zillow.

That drop, to a total estimated value of $21.9 trillion for U.S. homes, is 35 percent less than the drop experienced last year, when the nation’s homes lost $1.1 trillion in value.

Most of the decrease in 2011 occurred during the first half of the year, when the market lost $454 billion in value, Zillow said. The site projects values dropped a further $227 billion in the second half of 2011.

“While homeowners suffered through another year of steep losses, the good news is that homes are losing value at a substantially slower pace as the market works its way towards the bottom,” said Stan Humphries, Zillow’s chief economist, in a statement.

“Unfortunately, when we look ahead to next year, the unabsorbed pool of housing supply, dragging levels of consumer confidence, high unemployment and negative equity will continue to put downward pressure on the housing market, pushing our expectation for a potential recovery into late 2012 or early 2013,” Humphries added.

Only nine out of 128 markets tracked by Zillow (7 percent) saw an increase in home values this year. The New Orleans metro area experienced the largest gain (up $3.5 billion), followed by the Pittsburgh metro (up $2.7 billion), Zillow said.

The largest value losses occurred in the three largest metro areas tracked by Zillow: Los Angeles (down $75.5 billion), New York (down $44.8 billion), and Chicago (down $41.7 billion).

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