Homeowners lost almost half a trillion dollars in the value of their homes this year, down from $3.6 trillion in 2008, when the real-estate bubble burst.
Forty-eight of 154 housing markets tracked by Zillow, an online real-estate marketplace that maintains a database of housing statistics, showed gains this year, with the Boston metropolitan area posting the largest increase, $23.3 billion, to its estimated $540 billion in housing stock. Boston had a loss of $54 billion in 2008. The Providence, R.I., area was second, with a rise of $12.4 billion, offsetting a $29 billion drop last year.
Still, 21% of single-family homeowners owe more on their mortgages than their houses are worth, called being underwater. In the second quarter, the rate was 23%. Rising mortgage rates and foreclosures will serve to hold back the real-estate recovery.
“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,” says Stan Humphries, Zillow’s chief economist. “Both these factors will challenge the recent stabilization of home prices.”
Los Angeles home values plummeted $60.8 billion. In Chicago, values fell $49.6 billion. New York prices slumped $49 billion) and Miami-Fort Lauderdale values dropped $46 billion.
In Denver, home values shot up $10.7 billion after dropping $20 billion in 2008, and Atlanta prices rose $7.6 billion, compared with a $50 billion decline last year.
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