Zillow: $3.3 Trillion in Home Equity Vanished in '08

Home values fell almost 12% nationally in 2008, with much of the decrease coming in the fourth quarter, according to Zillow.com. That means homeowners lost $3.3 trillion in equity value for the year, with $1.4 trillion of the decline in housing values coming during the fourth quarter alone. Home values have now fallen for eight consecutive quarters, Zillow said. Since the housing market's peak in 2006, homeowners have lost $6.1 trillion in equity value, according to the Zillow index. Foreclosure sales made up more than one of every five transactions last year, Zillow said. Another 11% of sales in 2008 involved short sales. Zillow estimates that 18% of homeowners with a mortgage at the end of last year were "underwater," meaning they owed more than the home was worth.