U.S. Homes Expected to Lose Nearly $700 Billion in Value This Year

Posted by: Yeng Bun    Tags:      Posted date:  December 22, 2011  

According to analysis of recent Zillow Real Estate Market Reports, U.S. homes are expected to lose more than $681 billion in value  during 2011, which is 35 percent less than the $1.1 trillion lost in 2010.

The bulk of the total value lost during 2011 was in the first half of the year. From January to June, the U.S. housing market lost $454 billion. From July to December, the pace of value declines slowed and Zillow projects residential home value losses will total a significantly lower $227 billion.

Regionally, only nine out of 128 markets showed gains in home values during 2011, with the New Orleans metropolitan statistical area (MSA) showing the largest gain of $3.5 billion. The Pittsburgh MSA was second on the list, with a gain of $2.7 billion.

Ninety-two percent of markets analyzed for this report showed home value losses this year. In terms of total dollars lost in 2011, the biggest home value losses were in the large MSAs of Los Angeles (down $75.5 billion), New York (down $44.8 billion) and Chicago (down $41.7 billion). It is important to note that the large overall losses were due to the high number of homes in these metro areas, along with decreases in median home values.

While a large pool of housing supply, high negative equity, high unemployment, and low consumer confidence levels will continue to depress home values in 2012, the silver lining remains that homes have lost value at a much slower pace in the backend of 2011. We expect this trend to continue throughout next year as we coast towards an eventual bottom in late 2012 or early 2013.

An image of the U.S. annual change in total home value can be found here. Use the interactive graph below to view data by region.

A deeper look at the methodology behind this analysis can be found here.

About the author
Yeng Bun
Yeng is a Senior Data Scientist at Zillow. For more info on Yeng, click here.