U.S. homeowners lost $489 billion in value during the first 11 months of 2009, significantly less than the $3.6 trillion lost last year, a function of stabilizing home values and easing rates of negative equity during the third quarter, according to Zillow Real Estate Market Reports
Forty-eight of the 154 markets tracked by Zillow showed gains in home values during 2009, with the Boston metropolitan statistical area (MSA) showing the largest gain of $23.3 billion. The Providence, R.I. MSA was second on the list, with a gain of $12.4 billion.
“Home values stabilized significantly during the second half of 2009, with the total dollar value of U.S. homes increasing since June,” said Dr. Stan Humphries, Zillow’s chief economist. “Most housing markets across the country had a good summer, spurred largely by the government’s tax credits for homebuyers combined with very low mortgage rates. Unfortunately, we believe that demand will come under downward pressure as mortgage rates creep back up after the first quarter and that housing supply will experience upward pressure as the volume of foreclosures continues to remain high. Both these factors will challenge the recent stabilization of home prices.”
The biggest home value losses, in terms of total dollars lost in 2009, were in the large MSAs of Los Angeles (down $60.8 billion), Chicago (down $49.6 billion) and New York (down $49 billion). The large overall losses were due to a combination of the high number of homes in these metro areas, along with decreases in median home values.