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.
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