Home Values Lose $700 Billion This Year, Still Better Than 2010

Despite nearly $700 billion in losses this year, home values are still looking better as 2011 comes to a close than they did in 2010. An annual home value estimate made by online real estate giant Zillow, which went public earlier this year, indicates home values are down about $680 billion on a national basis. The decline, however, is 35% less than the $1.1 trillion in losses seen in 2010, Zillow reports.

“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, chief economist for Zillow. “Compared to last year when we saw sharp declines following the expiration of the homebuyer tax credits, this year we saw some organic improvement in home values, in terms of a slowed depreciation rate which resulted in a smaller total value loss for the year.”

While the vast majority of metropolitan areas saw losses, nine of the 128 markets Zillow tracks did post gains in 2011, with New Orleans and Philadelphia topping the short list. Areas seeing the greatest losses in dollar amounts over the course of the year were Los Angeles, New York and Chicago, according to Zillow.

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Looking ahead to 2012, Zillow estimates a recovery is on the horizon, but it may not be seen until late in the year.

“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 said.

Written by Elizabeth Ecker

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  • It is always entertaining to look at the prognostications of yesteryear.  On October 28, 2010, this was the headline and opening paragraph from a story John Yedinak posted:

    October Obama Housing Scorecard Shows Stabilization of Home Prices 

    Data from the October edition of the Obama Administration’s Housing Scorecard shows continued signs of stabilization in home prices according to the Department of Housing and Urban Development.

    What else is new?  There were calls after the tax credit went away that prices would go down but quickly rebound.  Oh, yeah, is that what happened?

    What are those prognosticators telling us now?  The turnaround will take place at the end of next year.  Didn’t they say that last year?

    Some have stated that prices are now down to 2003 levels.  There are new “guesses” that the situation will reverse when we reach 2002 price levels.  If the situation was not so serious, I would have asked if he really meant 1902 prices.

  • As opposed to what many individuals demand, it is essential to take into consideration how broad the real estate or housing industry is. It is virtually impossible to recover all loses or get the industry back up in just a short period of time especially when billions of dollars are involved. The situation may not be as ideal as many would prefer but it’s suffice to learn that:

    “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…” 

    Nonetheless, a critical approach should be enforced as it may be another case of wrongful reporting for pushing shady corporate interests. 

  • As opposed to what many individuals demand, it is essential to take into consideration how broad the real estate or housing industry is. It is virtually impossible to recover all loses or get the industry back up in just a short period of time especially when billions of dollars are involved. The situation may not be as ideal as many would prefer but it’s suffice to learn that:

    “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…” 

    Nonetheless, a critical approach should be enforced as it may be another case of wrongful reporting for pushing shady corporate interests. 

    • Peeveess,

      The quotation sounds like Pollyanna straining to find the silver lining.  The public is tired of hearing how much better things are than they might have been or somehow were in the past.  This is like trying to comfort the retiree who just her 401(k) statement which shows she has lost 5% rather than the 10% she did the year before.  She ends up wondering why she is putting money into her 401(k) when it is not only not growing but is losing value almost as soon as it goes in.

      I doubt if that quotation changed the mind of one senior about getting a HECM.  I would rather see growth in values than hear the most comforting statement about less loss.  Most of us are tired of losses.  We want change that will stem the losses.

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