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

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."







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jhon.morinho

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July 16 2013 at 12:32 PM Report abuse rate up rate down Reply
Mike

Mike .. just curious, have you ever attempted to sell any of your coins .. or buy something with 'em? How many are "legal tender" -- even in the country where issued?--------------------------------------------------------------------------------------------------Excellent question! The State of Utah HAS MADE GOLD AND SILVER COIN LEGAL TENDER! There are private banks in Utah that will take your REAL MONEY deposits and pay interest at full value in fed res notes and convert your real money to what ever fiat tender you need when you need it and even offer debit cards! You are good around the world and all 50 states. There are 12 more states in the process of doing the same. Also buying and selling gold silver coin is extremely easy! The price of gold eagles is over 1600 dollars an oz because first people are buying at that price. DEMAND ALWAYS PRECEEDS PRICE! Further I grocery shop and fill my gas tank with silver eagles every week. Just discuss with the business manager/owner you will be overwhelmed by the favorable acceptance and even gratitude you will get! My favorite service station owner LOVES reporting he sold a tank of gas for face value of one dollar and then selling that dollar for 40 res notes and rising. I help reduce his tax liability greatly and I do the same for my family Dr and my barber! Its the most fun you will ever have teaching folks how to be free of the evil fed res! Have fun and do your part to spread freedom! Got gold?

January 03 2012 at 5:58 PM Report abuse rate up rate down Reply
Mike

700 billion was NOT lost! It was stolin purposely by banksters! Got gold?

January 03 2012 at 10:57 AM Report abuse +1 rate up rate down Reply
some12bo

Housing bubble, sub-prime mess was intentional! The banks and the government was complacent about it. Google for "HOUSING BUBBLE KONDRATIEFF WAVE" to understand why. The debt load of the economy is too much. It cannot carry the burden of servicing excessive debt. Nothing has been fixed. Debt was the problem to begin with and we have more of it now. Next time you hear consumer is holding up the economy, keep in mind, it only means we are spending the money we don't have. It is a dead end. It will crash.

December 31 2011 at 12:55 PM Report abuse rate up rate down Reply
Mike

Fed res dollar printing has increased to keep up with US treasury's need for them as debt buyer of last resort. Euro is doing same for their debt but doesn't hold the luxury as world's res currency. Fed exports it's inflation to the world euro can't & WILL hypor inflate to ZERO. Europ will run to the dollar as others trade for gld/slvr. Even with small demand increase gld/slvr price rise outside the fed's ability to keep suprpressed & dollar will start its final fall, world WILL panic & gld/slvr will BE only reserve currency. World fiat monotary system is collapsing & we face deep depression. Got Gold? China & India does, why's that you figure?

December 27 2011 at 1:38 PM Report abuse +1 rate up rate down Reply
1 reply to Mike's comment
billyjoeobama

What does gold and silver soup taste like I wonder.

December 27 2011 at 1:53 PM Report abuse +2 rate up rate down Reply
1 reply to billyjoeobama's comment
Mike

much better than paper soup, gold is, has, and always will be real money easily traded. You just like your free ride from govt, its over your gonna have to produce.

December 28 2011 at 12:03 PM Report abuse +1 rate up rate down
BHarrison2

This is just the fall out from the real estate Ponzi scheme that was perpetuated during the economic boom years. It was the mortgage company CEOs, upper managment, and the property flippers, those others in the real estate industry that skimmed the profits out of it all. The REAL VALUE of a home is the costs of construction plus a reasonable profit; and the market is below that level. housing prices will not rise until the excess inventory of houses/condondo, the forecloser market, and the excess commercial real estate is leveled out to a healthy level of demand and supply . . . and that is going to take a decade, or longer, to occur.

December 27 2011 at 8:54 AM Report abuse +2 rate up rate down Reply
Relevant Data

These numbers must be wrong because Obama has been our leader in charge during 2010 and 2011. Certainly he would not allow homes of his fellow citizens loose such high monetary value. But he did promise change and the lesser values of homes does represent change. He also promised hope and I am sure many home owners hope the value of their homes will soon increase.

December 26 2011 at 11:58 PM Report abuse +4 rate up rate down Reply
1 reply to Relevant Data's comment
marilynbibbee

Relevant Data didn't do any homework or they would know what relevant data is involved in this mess. Start with Countgrywide and all their subprime mortgages that went to Hispanics and black families when they could have actually qualified for regular fixed rate mortgages. Then they shredded the paperwork and sold them to investors as AAA rated. They were only the tip of the iceburg as many other banks were also involved in this fraud. Relevant Data needs to get some relevant data instead of bashing our president.

December 27 2011 at 8:54 AM Report abuse -1 rate up rate down Reply
1 reply to marilynbibbee's comment
bggdg

Just what AOL needs. Another bigot spreading hatred on their comment boards.

Tell us, marilyn, is it just blacks and hispanics that you imagine are incapable of shopping for a mortgage based on their skin color, or does your bigotry extend to any other races/ethnicities?

Oh, and is it just the ability to shop for a mortgage that blacks and hispanics are incapable, or does their skin pigmentation leave them similarly disabled to accomplish other life tasks?

Go hate elsewhere, marilyn!

December 27 2011 at 1:05 PM Report abuse rate up rate down
billyjoeobama

Come on out Evan, you fool !

December 26 2011 at 11:19 PM Report abuse -1 rate up rate down Reply
tomgold125

We've got to get that marxist out of the white house before he destroys the whole country.

December 26 2011 at 11:13 PM Report abuse +3 rate up rate down Reply
1 reply to tomgold125's comment
juan354

Wasn't it Bush who started all this mess? It is going to take a while to take some time to get things back into what it once was, or used to be; the American dream to own a home and raise a family with family values. Its going to take some time; It will get better.

December 27 2011 at 7:25 AM Report abuse +1 rate up rate down Reply
2 replies to juan354's comment
savemycountry911

It will take 100 years to recover from Obama.

December 27 2011 at 7:29 AM Report abuse -1 rate up rate down
bggdg

LOL! Not hardly, juan.

The recent housing crisis traces its roots back to the mortgage interest deductiblity, first enacted in 1913 (at the time income taxes were instituted), which persists to this day. This deduction, which amounted to nearly $90 billion in 2008, increases the value of homes to borrowers by reducing the amount of taxes they have to pay, which inturn increases prices in the overall housing market, largely offsetting the advertised benefit. Still, it creates a strong incentive to buy multiple homes and to use maximum leverage to do so.

Of course, the failed social engineers were just getting warmed up. In 1934 the National Housing Act created the Federal Housing Authority to increase home ownership in the United States. FHA insured mortgages to encourage banks to loan more money for housing. Then in 1937, the Federal National Mortgage Association, the precursor to Fannie Mae,wais created by FDR, and authorized to buy FHA insured mortgages from banks, which it then repackaged and sold as securities to investors.

Of course, these government attacks against American citizens weren't done yet. In 1968 Fannie Mae was separated from the FHA, becoming a Government Sponsored Enterprise (GSE), which enabled LBJ to hide government budget deficits created by his "Great Society" policies by removing Fannie Mae from government balance sheets, while continuing to expose taxpayers to its risks. Then in 1970, LBJ created yet another GSE, The Federal Home Loan Corporation, now known as Freddie Mac, to serve essentially the same purpose as Fannie Mae – expanding the secondary market for mortgages in the United States.

Still not satisifed, in 1977 The Community Reinvestment Act (CRA) was enacted, requiring banks to loan within areas where the banks are located, regardless of the eligibility of potential borrowers. To enforce the statute, government agencies took the information they gathered on the banks into consideration when deciding to approve applications for new bank branches or for mergers or acquisitions. The CRA was subsequently strengthened in both 1989 and 1995, which allowed both special interest groups as well as government regulators to engage in extortion, further forcing banks to make loans they would have otherwise deemed inappropriate.

Of course, Bush too finally got into the act in 2003 with the American Dream (Nghtmare) Downpayment Act, which forced other Americans to pay downpayment and closing costs for first time home buyers.

So no, juan. It wasn't Bush "who started all this mess" (although he certaintly helped).

December 27 2011 at 2:39 PM Report abuse +1 rate up rate down
billyjoeobama

Barry will have everyone living in tents soon like his misfit OWS misguided liberals.

December 26 2011 at 11:07 PM Report abuse +1 rate up rate down Reply