Dec 9 10:29 AM US/Eastern
The US real estate maket is expected to decline in value by 1.7 trillion dollars in 2010, worse than the losses in 2009, a research firm said Thursday.
Zillow, a firm which tracks home prices, said the 2010 losses will bring to nine trillion dollars the total decline since the market peak in June 2006.
The bulk of the total value lost during 2010 was in the second half of the year, Zillow said. From January to June, the housing market lost 680 billion dollars, and Zillow projected residential home value losses for the second half of the year will top one trillion dollars.
"Despite a strong start to 2010, by the end of the year homes lost more of their value in 2010 than they did in 2009," said Zillow chief economist Stan Humphries.
"Government interventions like the homebuyer tax credit helped buoy the market during the second half of 2009 and the first half of 2010, but we saw a renewed downturn in the last half of this year.
"It's a testament to the nearly irresistible force of the overall market correction that government incentives can only temporarily hold back the tide, and that the market will ultimately find its natural equilibrium of supply and demand."
Humphries said the outlook for early 2011 is equally bleak.
"Unfortunately, with foreclosures near an all-time high in late 2010 and high rates of negative equity persisting, it does not appear that the first part of 2011 will bring much relief," he said.
Declines in home values have led to increases in the percentage of homeowners in negative equity. At the end of 2009, 21.8 percent of single-family homeowners with mortgages were in negative equity, meaning they owed more on their mortgage than their home was worth. In the third quarter of 2010, Zillow calculated that 23.2 percent were underwater.
Zillow said home prices lost a collective one trillion dollars in 2009.
Breitbart
Zillow, a firm which tracks home prices, said the 2010 losses will bring to nine trillion dollars the total decline since the market peak in June 2006.
The bulk of the total value lost during 2010 was in the second half of the year, Zillow said. From January to June, the housing market lost 680 billion dollars, and Zillow projected residential home value losses for the second half of the year will top one trillion dollars.
"Despite a strong start to 2010, by the end of the year homes lost more of their value in 2010 than they did in 2009," said Zillow chief economist Stan Humphries.
"Government interventions like the homebuyer tax credit helped buoy the market during the second half of 2009 and the first half of 2010, but we saw a renewed downturn in the last half of this year.
"It's a testament to the nearly irresistible force of the overall market correction that government incentives can only temporarily hold back the tide, and that the market will ultimately find its natural equilibrium of supply and demand."
Humphries said the outlook for early 2011 is equally bleak.
"Unfortunately, with foreclosures near an all-time high in late 2010 and high rates of negative equity persisting, it does not appear that the first part of 2011 will bring much relief," he said.
Declines in home values have led to increases in the percentage of homeowners in negative equity. At the end of 2009, 21.8 percent of single-family homeowners with mortgages were in negative equity, meaning they owed more on their mortgage than their home was worth. In the third quarter of 2010, Zillow calculated that 23.2 percent were underwater.
Zillow said home prices lost a collective one trillion dollars in 2009.
Breitbart
