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

housing outlook
housing outlook

The 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.


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


New York, N.Y.MSA

-$44.8 billion

-$46.7 billion



Los Angeles, Calif.MSA

-$75.5 billion

-$50.3 billion

$1.7 trillion


Chicago, Ill.MSA

-$41.7 billion

-$56.1 billion

$611.6 billion


Dallas, Texas. MSA

-$11.1 billion

-$19.1 billion

$274.5 billion


Philadelphia, Penn.MSA

-$21.8 billion

-$28.3 billion

$496.1 billion


Washington, D.C. MSA

-$2.9 billion

-$16.5 billion

$779.7 billion


Miami-Fort Lauderdale, Fla.MSA

-$6.5 billion

-$28.6 billion

$479.4 billion


Atlanta, Ga.MSA

-$29.6 billion

-$32 billion

$263.6 billion


Boston, Mass.MSA

-$9.5 billion

-$9.9 billion

$482.2 billion


San Francisco, Calif.MSA

-$29.4 billion

-$27.6 billion

$700.8 billion


Detroit, Mich.MSA


-$12 billion

$180.6 billion


Riverside, Calif.MSA

-$14 billion

-$5 billion

$270.1 billion


Phoenix, Ariz.MSA

-$12.5 billion

-$35.6 billion

$258 billion


Seattle, Wash.MSA

-$22.4 billion

-$29.7 billion

$348.6 billion


Minneapolis-St. Paul, Minn.MSA

-$16.5 billion

-$17.5 billion

$227.1 billion


San Diego, Calif.MSA

-$9.7 billion

-$13.8 billion

$393.6 billion


St. Louis, Mo.MSA

-$11.9 billion

-$6.8 billion

$150.3 billion


Tampa, Fla.MSA

-$10.1 billion

-$16.1 billion

$159.3 billion


Baltimore, Md.MSA

-$8.9 billion

-$15.9 billion

$271.8 billion


Denver, Colo.MSA

-$5.5 billion

-$9 billion

$216 billion


"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."

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