Home Values Continue Slide in 2011

Home Values Continue Slide in 2011
  • Opening Intro -

    Five consecutive years of declining home values have taken its toll on the country, with homeowners shouldering the brunt of these losses.

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Sliding home values ease somewhat as year comes to a close.

In 2010, home values fell a collective $1.1 trillion according to Zillow, but in 2011 those losses have eased with Zillow estimating that home values fell by approximately $681 billion or 5.1 percent.

National Losses

Zillow states that the bulk of the losses for the year were realized in the first six months of the year, falling by $454 billion. Since then, losses have slowed and have fallen at a pace that is half that of the first six months of 2011 at $227 billion.

One hundred and twenty-eight metropolitan statistic areas are tracked by Zillow, with nine showing gains for 2011. New Orleans, which saw its home prices fall dramatically following Hurricane Katrina in 2005, had the largest increase of the nine gaining MSAs. Home prices in New Orleans increased by $3.5 billion followed by Pittsburgh at $2.7 billion. The biggest losses have taken place in the largest metropolitan areas with Los Angeles (down $75.5 billion), New York (down $44.8 billion) and Chicago (down $41.7 billion). Atlanta’s market, which fell by $32 billion, had one of the largest percentage losses, with a 14.7 percent decline.

Economic Recovery?

Offering comment on behalf of Zillow was the company’s chief economist, Stan Humphries, who stated, “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. 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.”

Humphries added that the losses are not over yet noting that 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…” and may push off the recovery until late 2012 or early 2013. A delayed economy will likely have a huge impact on next year’s general election with Barack H. Obama seeking a second term and a Republican hopeful working to send him home.

Home Values

For homeowners who have seen their home values slide substantially since 2007, the recovery cannot come soon enough. Positive local conditions, such as those found in New Orleans and Pittsburgh, demonstrate that prices can stabilize and even rise. But prices can vary dramatically from neighborhood to neighborhood, something buyers, sellers and refinancers should consider and obtain local comps for accurate localized information.

See AlsoHow to Increase the Resale Value of Your Home

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Categories: Money Management