U.S. Homes Lose $3.3 Trillion in Value

Fourth quarter 2008 home prices declined for the eighth consecutive quarter, and according to a "Zillow":http://Zillow.com Home Value Index, the 11.6 percent decline cost American homeowners a total of $1.4 trillion in home value, bringing the total drop in value for 2008 to $3.3 trillion.
The fourth quarter loss is greater than the entire loss of 2007, when cumulative home prices dropped $1.3 trillion during 2007. Since the housing market’s peak in 2006, Zillow said $6.1 trillion in home values have been lost across the 161 markets it tracks.
Stan Humphries, Zillow VP of data and analytics said, "The fourth quarter is the first in which we were able to see the effects of the mounting economic insecurity that picked up steam in the fall of last year. People without jobs, or fearing job loss, typically don't buy homes, no matter how low prices or mortgage rates might be."
Foreclosures comprised nearly 20 percent of all real estate transactions in 2008, data compiled by Zillow showed. Zillow also recorded short sale data, and found they made up 10.9 percent of real estate transactions nationwide.
According to Humphries, "As more markets turn down and markets that were already down go deeper, the pace at which value is being erased from the U.S. housing stock is rapidly increasing."
Despite the continuing decline, 21 markets Zillow tracks had either unchanged or increases in value. Pittsburgh saw a 0.1 percent decline, and Fayetteville, North Carolina saw a 6.9 percent increase, and Yakima, Washington also saw a similar increase of 6.2 percent over the course of 2008. New York state, the Midwest and the South also all saw steady or increasing home values.