The total value of homes in the Denver area is expected to fall by $5.5 billion for the year, bringing the total value of homes in the city down to $216 billion, according to a recent analysis of national home data by Zillow Real Estate Market Reports.
While the decline in total home is significant, it does represent a slowdown in the drop in the value of homes in Denver. In 2010, the total value of homes in Denver fell by $9 billion, bringing the year-to-year decline at 2.9 percent. Overall, the total value of homes in Denver stands at $216 billion.
The $5.5 billion total value decline in Denver does, however, represent one of the lowest total value declines among the 20 largest markets tracked by Zillow Real Estate. Only homes in Washington, D.C., at $2.9 billion, and Detroit, which lost no value, posted lower numbers. Los Angeles is expected to see the biggest decline in home value at $75.5 billion.
On the other end of the spectrum, nine metropolitan areas (out of 128 markets analyzed) are expected to actually see the total value of homes there rise by the end of 2011. New Orleans is showing the largest to9tal home value growth at $3.5 billion, followed by Pittsburgh at $2.7 billion.
Overall, homes in the U.S. expected to lose approximately $681 billion total in value, significant but still a far cry from the $1.1 trillion U.S. homes lost in value in 2010, said Zillow representatives.
“While homeowners suffered through another year of steep losses, the good news is that homes are losing value at a substantially slower pace as the market works its way towards the bottom,” said Zillow Chief Economist Stan Humphries. “Compared to last year when we saw sharp declines following the expiration of the homebuyer tax credits, this year we saw some organic improvement in home values, in terms of a slowed depreciation rate which resulted in a smaller total value loss for the year.”
Humphries said that cities such as Denver shouldn’t expect a big recovery from the decline in home prices anytime soon, due to a large unabsorbed housing supply, low consumer confidence, unemployment and negative equity.
“Unfortunately, when we look ahead to next year, (those factors) will continue to put downward pressure on the housing market, pushing our expectation for a potential recovery into late 2012 or early 2013,” said Humphries.
The majority of the loss in home value came during the first half of 2011 when the U.S. housing market lost approximately $454 billion. Zillow said that from July to December, the housing market is expected to lose another $227 billion.
Only single-family homes, condos and co-ops were included in the analysis and calculation of total market value.