U.S. Homes Lose $700 Billion in Value in 2011 -- and That's the Good News

Before you go, we thought you'd like these...
Before you go close icon
housing outlookThe year-end housing news is sobering -- U.S. homes are expected to lose more than $681 billion in value in 2011. But there's an upside -- that's 35% less than the $1.1 trillion lost in 2010, according to new research from Zillow (Z), a real estate information marketplace.

What else did the research show? Just nine out of 128 markets analyzed had gains in values in 2011. Bragging rights go to the New Orleans area, where the gains were greatest at $3.5 billion. Pittsburgh claimed the number two spot with a gain of $2.7 billion.

Who were the biggest losers? Big cities with lots of housing, like Los Angeles, down $75.5 billion, New York ($44.8 billion), and Chicago ($41.7 billion). Overall, more than 90% of markets lost value.

Region

Estimated Home Value Loss/Gain in 2011(i)

Home Value Loss/Gain in 2010(iii)

Total Estimated Home Value in 2011(iv)

Zillow Home Value Index(v)YoY Change (Oct.)

United States

-$681.1 billion

-$ 1.1 trillion

$21.9 trillion

-5.1%

New York, N.Y.MSA

-$44.8 billion

-$46.7 billion

$1.7trillion

-4.4%

Los Angeles, Calif.MSA

-$75.5 billion

-$50.3 billion

$1.7 trillion

-7.4%

Chicago, Ill.MSA

-$41.7 billion

-$56.1 billion

$611.6 billion

-10.4%

Dallas, Texas. MSA

-$11.1 billion

-$19.1 billion

$274.5 billion

-4.9%

Philadelphia, Penn.MSA

-$21.8 billion

-$28.3 billion

$496.1 billion

-4.6%

Washington, D.C. MSA

-$2.9 billion

-$16.5 billion

$779.7 billion

-1.9%

Miami-Fort Lauderdale, Fla.MSA

-$6.5 billion

-$28.6 billion

$479.4 billion

-4.9%

Atlanta, Ga.MSA

-$29.6 billion

-$32 billion

$263.6 billion

-14.7%

Boston, Mass.MSA

-$9.5 billion

-$9.9 billion

$482.2 billion

-2.7%

San Francisco, Calif.MSA

-$29.4 billion

-$27.6 billion

$700.8 billion

-6.3%

Detroit, Mich.MSA

$0

-$12 billion

$180.6 billion

-6.7%

Riverside, Calif.MSA

-$14 billion

-$5 billion

$270.1 billion

-5.9%

Phoenix, Ariz.MSA

-$12.5 billion

-$35.6 billion

$258 billion

-8.4%

Seattle, Wash.MSA

-$22.4 billion

-$29.7 billion

$348.6 billion

-9.4%

Minneapolis-St. Paul, Minn.MSA

-$16.5 billion

-$17.5 billion

$227.1 billion

-9.1%

San Diego, Calif.MSA

-$9.7 billion

-$13.8 billion

$393.6 billion

-5.5%

St. Louis, Mo.MSA

-$11.9 billion

-$6.8 billion

$150.3 billion

-9.1%

Tampa, Fla.MSA

-$10.1 billion

-$16.1 billion

$159.3 billion

-10.7%

Baltimore, Md.MSA

-$8.9 billion

-$15.9 billion

$271.8 billion

-3.2%

Denver, Colo.MSA

-$5.5 billion

-$9 billion

$216 billion

-2.9%



"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," noted Zillow Chief Economist Stan Humphries in the report. "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."

Keith Gumbinger, vice president of HSH.com, a publisher of mortgage and consumer loan information, suspects that "pockets of strength -- green shoots -- are likely occurring in places where there has been actual job growth." New Orleans, for instance, added 684 new jobs just this week, and more than 10,000 over the past 12 months.

What's the real estate market outlook for 2012? Depends on who you ask. According to Zillow's Humphries, "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."

Gumbinger is a bit more optimistic, "There's the possibility that more markets will join the 'increasing' fray, provided present improving trends in employment continue. Record levels of affordability, including record low mortgage rates, are starting to have some effect."

Lawrence Yun, chief economist with the National Association of Realtors, takes a similarly rosy view. "With housing inventory down significantly in 2011, home prices could easily turn up in 2012," he says. "If a very modest 3 to 5% price gain, then housing valuation would rise by $500 to $900 billion."

For home buyers, that may mean fewer rock-bottom deals next year--at least not from potential sellers still occupying their homes, Gumbinger says. "The lower-priced deals, if they come, will probably show in the form of additional foreclosed inventory hitting the market as we move past the 'robo-signing' and foreclosure-moratorium mess of 2011."


13 PHOTOS
Top 10 College Towns for Buying Foreclosures
See Gallery
U.S. Homes Lose $700 Billion in Value in 2011 -- and That's the Good News

For real estate buyers who have the cash and credit to take advantage of historically low mortgage rates, there is one market type that tends to be more resilient than others: the college town.


Established, big-name universities, with their steady and ever-replenishing supplies of new students, faculty and administrators, virtually guarantee tenants and future buyers. Additionally, more retirees are choosing to move to college towns for the cultural amenities. Of course, the downsides for home buyers, particularly investors, are that renting in college towns is a somewhat seasonal business, with a summer decline, and there's always the threat of keg-party damage.


Foreclosure sales data compiled by Foreclosure News Report for the first half of 2011.

The College Town of: Stanford University


Amount of properties sold: 94


Average price of foreclosures: $350,886


Percent below the average price of properties: 69%


Percent of foreclosures from all home sales: 17%

The College Town of: Ohio State University


Amount of properties sold: 999


Average price of foreclosures: $57,700


Percent below the average price of properties: 58%


Percent of foreclosures from all home sales: 17%

The College Town of: University of Louisville


Amount of properties sold: 889


Average price of foreclosures: $84,495


Percent below the average price of properties: 51%


Percent of foreclosures from all home sales: 25%

The College Town of: Northwestern University


Amount of properties sold: 74


Average price of foreclosures: $190,930


Percent below the average price of properties: 47%


Percent of foreclosures from all home sales: 24%

The College Town of: Louisiana State University


Amount of properties sold: 221


Average price of foreclosures: $115,043


Percent below the average price of properties: 45%


Percent of foreclosures from all home sales: 14%

The College Town of: University of Arizona


Amount of properties sold: 3,068


Average price of foreclosures: $116,916


Percent below the average price of properties: 41%


Percent of foreclosures from all home sales: 50%

The College Town of: University of Tennessee


Amount of properties sold: 431


Average price of foreclosures: $108,595


Percent below the average price of properties: 41%


Percent of foreclosures from all home sales: 8%

The College Town of: Florida State University


Amount of properties sold: 339


Average price of foreclosures: $112,790


Percent below the average price of properties: 35%


Percent of foreclosures from all home sales: 29%

The College Town of: Texas Tech University


Amount of properties sold: 74


Average price of foreclosures: $91,454


Percent below the average price of properties: 33%


Percent of foreclosures from all home sales: 5%

The College Town of: University of Michigan


Amount of properties sold: 130


Average price of foreclosures: $181,766


Percent below the average price of properties: 31%


Percent of foreclosures from all home sales: 24%

of
SEE ALL
BACK TO SLIDE
SHOW CAPTION +
HIDE CAPTION




Read Full Story

Markets

S&P 500 2,204.71 12.76 0.58%
DJIA 19,216.24 45.82 0.24%
NASDAQ 5,308.89 53.24 1.01%
DAX 10,708.18 23.35 0.22%
HANG SENG 22,675.15 169.60 0.75%
NIKKEI 225 18,360.54 85.55 0.47%
USD (per EUR) 1.07 0.00 -0.18%
USD (per CHF) 1.01 0.00 0.19%
JPY (per USD) 113.87 0.01 0.00%
GBP (per USD) 1.27 0.00 0.15%

From Our Partners