U.S. Home Values to Fall by $1.7 Trillion in 2010
The value lost this year will be 63% more than in 2009, and will take the total value lost since June 2006 to more than $9 trillion, Zillow said on its blog.
"Since the peak of home values in June 2006, more than $9 trillion in values has come out of the housing market," Zillow said. "As a comparison, that's more than the cost of 12 wars in Iraq, according to a study by the Congressional Research Service."
Attorneys general in all 50 states are investigating allegations that lenders used flawed documentation to seize homes.
The national median home value fell 5% in the year to October, Zillow said.
Los Angeles, Calif., had the largest total decline in values, with home values expected to fall $676.6 billion in 2010. The smallest decline of those listed by Zillow was in Denver, Colo., where value fell by $29.8 billion.
"If a homeowner wants to sell or refinance, the current value of their property becomes more important," Zillow said. "In the case of negative equity, all bets are off."
The slump will likely continue in 2011, as the economy remains sluggish. It could take years before prices take off again.
"Thanks to high rates of foreclosure and negative equity, it does not appear that the first half of 2011 will bring much relief," Zillow said. "The hope is that the market will reach a bottom sometime next year, and that average rates of appreciation will return sometime in the next three to five years."