Zillow.com: Home Value Losses Stabilize in 2009

U.S. home prices stabilized (relatively) in 2009 after losing trillions of dollars in value during 2008, according to real estate website Zillow.com. Homes lost $489 billion in value during the first 11 months of 2009, significantly less than the $3.6 trillion lost during 2008, according to Zillow's real estate market reports. Forty-eight of the 154 markets tracked by Zillow showed gains in home values during 2009. The Boston metropolitan statistical area showed the largest gain of $23.3 billion, while the Providence, Rhode Island, MSA was second, with a gain of $12.4 billion. The stabilization in home values reduced rates of negative equity in the third quarter of the year. Twenty-one percent of single-family homeowners had mortgages under water compared with 23% in the second quarter. Most housing markets had a good summer, spurred largely by the government's tax credits for homebuyers, combined with very low mortgage rates, said Stan Humphries, Zillow chief economist. "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," Mr. Humphries said. "Both these factors will challenge the recent stabilization of home prices." Zillow.com said 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.