Home values across the U.S. will drop by more than $1.7 trillion this year, 63% more than their 2009 decline, according to an analysis by real estate marketplace Zillow.com. It estimates that from a June 2006 market peak to the end of 2010, values will have fallen by $9 trillion.
Zillow compiles its own "Zestimates" and includes all homes, not just those sold. The 2010 loss works out to an average of $18,108 per home. Zillow's data cover single-family houses, condos and co-ops.
Most losses in 2010 were in the second half of the year. In January through June, the housing market slipped by $680 billion.
"The reason for the fact that the losses were so much larger in the back half of the year than the front half is essentially the tax credit," Zillow chief economist Stan Hum- phries told IBD. "You can only put your finger in the dike so long. The market correction is going to go where it needs to go for supply and demand to reach equilibrium."
With foreclosures and negative equity still high, it doesn't look like early 2011 will bring much relief, Humphries says. He doesn't expect a bottom till at least midyear.
In the third quarter, 23.2% of homeowners were underwater, owing more on the mortgage than their homes are worth.
Fewer than one in four of the 129 markets that Zillow tracks will see gains in total home values during 2010. Those forecast to go up in value include the Boston metro area, up $10.8 billion, and San Diego, up $10.2 billion.
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